Buenos Aires, May 22, 2008
President's Office Ms Dr. Cristina Fernández
Present Issues:
• Warn of the existence of a serious error in the recent enactment of Decree 764/08.
• Exposing an alternative solution to the conflict affecting the country field
of my highest consideration:
As an Argentine citizen me respectfully feel compelled to write these lines on the occasion of the recent regulatory order was issued to the law 764/08 26,351.
In the preamble and operative part thereof has committed a grave error, which is incurable vice, which would force me to challenge it in court under the criminal complaint (Case 4713/08) that the marketing around grains, we have made together with Dr. Ricardo Monner Sans and Javier Llorens.
As stated in the preamble of the decree "by Law No. 26,351 was intended to avoid an imminent policy change to increase export duties, register operations, by affidavits Foreign Sales dummy-with so taxed with lower tax rate. "
This was precisely the intention of the legislature after sanctioned the Nov. 9 resolution 369/07 of the Ministry of Economy, which provided an increase in the retention of soybeans.
However in the 2nd article of the decree provides that the 26,351 law retroactivity will apply only after the Nov. 9, bypassed in this way-neither more nor less, than the period that gave rise to speculation, and the issuance of the law correctly.
By ignoring the period prior to the issuance of the Resolution 369/07, the maneuver remains intact perpetrated by exporters prior to their dictation. Maneuver that led to Mr. deputies to drive the original text of Law 26,351, whose contents were then misrepresented in the Upper House, with the illegal intervention of Senator Urquía, as we have reported to the Justice
Decree 764/2008 therefore contain a serious misrepresentation, since in its preamble says that the reason the law was resolution 369/07 26 351 last November, however extending the retroactive application of the law only until the date of this resolution, despite the clear intent of lawmakers was to have retroactive law prior to the resolution.
The enormous importance of this misguided provision can be seen in the table below.
(Blog Note: See Table 1 published on the title above.)
It notes that, according to information provided by CIARA (Oil Industry Chamber RA) - in the ten weeks prior to the issuance of that decision, on an incessant crescendo shamelessly recorded Declarations Foreign Sales (DJVE) refer to "soy complex, an amount equal to half the annual crop of soybeans. Interestingly
on working days 7, 8 and 9 November prior to the enactment of said resolution 369, not recorded in the case of soybeans, not a single DVJE. Having declared in the previous two days 1,739,841 tonnes the equivalent of 50,000 truckloads of soybeans.
This shows on the one hand, the existence of a clear leakage of information from government areas and on the other side of the complex and exporter of soybeans was more than satisfied with the assumed export position.
With all due respect to his inauguration, I must say that in my opinion, the framers of the decree relating to the export of grains or 26,351 have misunderstood the law, or it may be that the export interests represented by Senator Urquía, have spread its influence beyond the Senate.
also must tell, I fear that other serious errors of understanding have resulted in deep conflict with his government maintains the field. Therefore, with this call to the correction of the Decree 764 in question, I also send you some thoughts, I understand clarifying some technical points that may help us to rethink a proposed solution to this serious conflict that afflicts the country today. Motiva
this attitude, the fact that usually disqualifies the political opposition, saying that only makes allegations destructive, not constructive proposals, such as the following step to develop in complete good faith, in order to find solutions that result in welfare of all Argentines.
All Argentines know that the knot of conflict was the passing of Resolution 125/08 of creation of the sliding tax. But few Argentines know that if applied correctly to the Customs Code, the conflict could get back on track without making any substantive changes in content. And no need to make agreements with other actors hidden that have impacted heavily on the conflict, as are the mass media, with its hidden costs.
Art. Customs Code 737 (CA) provides that the deductions should be calculated on the FOB value, but an amount corresponding withholding themselves (known as FAS price). However, in most of the discussions, both public and private- on the amount to be collected by withholding erroneously calculating directly over the FOB.
The difference is not minor. At current levels of retention of approximately 40% with soybean harvest 50 million tons, valued abroad at 25,000 million dollars (M u $ s) according to the Customs Code should raise 7,142 M or $ s get to the producer a remnant of 17,858 M u $ s. On the contrary, if calculated directly on the FOB price recovery by withholding amount to 10,000 M USD and the remainder to the producer would be 15,000 M u $ s.
The difference M u $ s 2,858, a figure that by itself will resolve the issue del quantum, que esta planteada en torno al impacto de las retenciones sobre la renta agraria. Sin embargo esta diferencia no ingresará al fisco, sino por contrario, lo más probable que vaya a engrosar el bolsillo de los exportadores de granos, que ciñéndose al Código Aduanero, liquidan la retención conforme las previsiones de este.
A esto debe sumarse la diferencia que hacen los exportadores de granos con el mecanismo de las Declaraciones Juradas de Venta al Exterior, que el proyecto original de la ley 26.351 trató vanamente de coartar. Solo en el caso del complejo soja, sobre los 23 millones de toneladas registradas ficticiamente antes de la resolución 369/07, esto significaría otros 2.120 M u$s.
So it would be at stake amounting to between 5,000 and 6,000 m u $ s, which properly addressed under the law, would attend more than to resolve the conflict between all sectors involved in it honestly. In this regard, the State seems to have only emphasized the aspect that domestic prices are to be retained, entirely unconcerned aspects of their collection. This has led to a kind of "privatization" of this tribute, in which agents must oblarlo seem to have made a killing.
Another conflict is the one related to opposition from the country to accept a kind of export price ceiling, which application resolution 125/08.
Assume that the state can apply retention percentages close to 100% of the FOB value, or involving the state almost entirely capture the income of producers is an aberration arising from the above mentioned error. By applying the mathematical formula for calculating Resolution 125/08 and-repeat wrongly withholding tax on the FOB value, is set confiscatory mechanism where the state appropriates almost entirely of all the income, when grain prices rise above the 600 U $ S / ton.
However, if applied the same mathematical formula on the FAS value, as indicated by the Customs Code, retention never exceed 50% of the FOB price and no aberration as possible.
Finally, as we all know, the farm crisis has also expressed a claim within the country. We know the justice of the claim to improve the struggling tax-sharing revenues with the provinces and municipalities.
In that sense, correctly calculating deductions received by the central government may leave to raise a restructuring of provincial finances. With a current 40% withholding on FAS, the net retention would be 28.5% on FOB. The producers claim is below 35% FOB. This would give scope for progressive provincial gross income up 35% (or more according to the producer) as a kind of provincial royalty (6.5% of FOB is 9% of FAS) or a progressive land tax.
export taxes are not new in the economic history of our country, but are relatively recent and were replanted in 2001. Substantial technical aspects of its implementation are not usually part of the discussion raised. But for sure, nobody really knows where they go, because much of these deductions appear to have been "privatized" in favor of marketing sectors, and especially the export of grains in the hands of multinationals. These
sectors are those who have given and it seems that will continue to-increase-the big bite of the apple of discord in which deductions have been made through the game of the settlements in duplicate at the Customs, confusing price with FAS FOB price, and Affidavits of sales abroad, made even before planting the beans.
However, both the government and the leadership of the field act as if there were not that big bite, as if they were silent accomplices of that sector of the marketing and export of grains in the hands of multinationals.
however, preclude such a large bite from the multinationals, may be the pledge of seal peace understanding between the government and country, between the Interior and the Port, and restore harmony in the Republic and the proceedings of this. Without having to resort to this to anyone's media services, and subsequent costly bill passes. That will ultimately redound against the very essence of the democratic system, such as freedom of expression.
For this reason I encourage you to send you this letter to focus the question fully and honestly in the interests of the genuine interests of the country, beyond the powerful and quiet lobby exerted by grain dealers in our home and world. Eng
Former Congressman Mario Cafiero
National
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