Argentina parliament backs tax hike

Farming groups vow to continue battle against controversial grain export tariff.

    Farm groups suspended sales and blocked roads in protest at the tax decree [File: AFP]

    "We're still playing in the first half,'' Eduardo Buzzi, Argentine Agrarian Federation chief, said.

    "In the second half, we're going to play in the senate and we'll go to the courts, even to the supreme court,'' to stop the new taxes.

    The senate is scheduled to debate the measure in the coming days, while the supreme court has already agreed to hear one case, brought by the province of San Luis, which claims the new taxes are unconstitutional.

    Plummeting popularity

    The situation has pushed Kirchner's popularity down to just to 26 per cent, according to an opinion poll conducted in May.

    However, she refused to reverse course on the taxes, which she says are necessary to share Argentina's rising commodity income with its 10 million poor.

    Kirschner sent the tax package to congress hoping that the majority her Peronist party enjoys in both houses would see the taxes passed without difficulty.

    But during the debate on Friday and Saturday, some party members, as well as others from the allied Front for Victory party, openly opposed the
    measure.

    Farmers say that the tax hike will prevent them from reinvesting profits in production to meet rising demand.

    Argentina is the world's third-largest exporter of soy and wheat and the second-biggest exporter of corn.


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