The automobile chain lost and won in 48 hours

The automobile chain lost and gained competitiveness in just 48 hours. On Monday, he had seen the costs of importing inputs increase and yesterday he recovered the export refunds, thanks to the refund of taxes paid in the production process.

For now, the sector does not know yet whether the end result is for or against. The only certainty he has is that, once again, the government has changed the rules of the game to ensure data collection and achieve the goal of eliminating the primary fiscal deficit.

In parallel with the application of withholding tax on vehicle exports, the government reduced refunds from 6.5% to 2% last September, which affected sales to Mercosur, given that remaining destinations the scheme remained the same.

But by Decree 338/19 published yesterday in the newspaper Official newspaper, the executive restored export refunds to their original level.

The measure stemmed from a proposal submitted to Minister Nicolás Dujovne by the Chamber of Metallurgical Industries and Components of Córdoba (Cimcc).

The work, prepared by the economist Gastón Utrera, shows that the change made last year led to a 31% drop in exports.

Therefore, by simply replacing the refunds, sales abroad would recover almost to the same level as in August 2018 (20,000 units per month). In addition, with the highest collection for export duties, credit and debits taxes, and higher employer contributions, the fiscal cost of the measure would be zero. A surplus of one billion dollars would also be realized until the end of the year, according to the proposal of the Cimcc.

Industrial dislocated

This measure was expected by the sector for 15 days. But, from what we knew 48 hours earlier, the result fell "like a bucket of cold water" and left it "misplaced" as recognized by industrialists who have requested a reservation.

The government issued Decree 332/19 on Monday, which raised the statistical import rate from 0.5% to 2.5% on the value of goods entering the country.

In addition, it removed the exemptions at this rate, as in the case of temporary imports, from inputs that are not nationalized because they are used to produce goods that will then be exported.

According to a calculation from the Córdoba Stock Exchange, if the exemptions were maintained, the government would get an additional income of 12,400 million pesos. But, lowering these benefits, this figure would reach 29 800 million pesos.

Some members of the automotive chain estimated yesterday that it would increase by 1 to 1.5% the cost of vehicle components.

"For the sector, it is good to recover the export refunds, but the increase in the rate of imports strikes again against competitiveness," recognizes Eduardo Borri, president of Cimcc. It also affects the rest of the industrial exports, including mbad consumer foods such as coffee, cocoa butter and other alcoholic beverages used by the food industry, the cost of which will increase by 2%.

"This has a double impact, increasing the real and financial costs of importing, the most serious of which is that it undermines the competitiveness of goods and services and makes the rules more and more unpredictable. collection, a measure is taken that will probably remove the dynamism of exports, "says Miguel Zonnaras, an industrialist from Cordoba and president of the Federation of Foreign Trade Chambers of Argentina.

Temporary scheme: new negotiation