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Paraguay to Tax Soybean Exports

LADB Article ID: 80376
Category/Department: Paraguay
Date: 2017-08-11
By: Andrés Gaudín

Three years after Frente Guasú (FG), the party of deposed President Fernando Lugo (2008–2012), proposed a bill to tax unprocessed soybeans exports, Paraguay’s Senate has surprisingly revived the idea and quickly approved it. When proposed in Congress in 2014, the bill proposed a 15% tax on the exports of unprocessed soybeans, corn, and wheat. However, the powerful agricultural lobby forced negotiations that reduced the tax to 10% on the oilseeds and removed wheat and corn from the list, leaving the latter two at zero taxation. Voicing the view of those in favor of the tax, Mercedes Canese, an agronomist and FG adviser, said, “The measure is strictly liberal; it is neither socialist nor leftist; it is not revolutionary; it amounts to a transition from the feudalism of the Middle Ages to the Industrial Age, barely the most modern form of capitalism.” Final approval of the project now requires a vote in the Chamber of Deputies, and although the parties have agreed to move it forward, it will still face serious obstacles. “The coercion of soybean growers will be much greater than in the Senate,” Canese warned, explaining that deputies are elected by departments, and that in the 14 departments within the soybean region, “the producers are the ones that finance election campaigns.”

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