14 May 19

Argentina stimulating Mercosur auto exports through tax breaks

Argentina’s government has increased tax rebates on auto exports to Mercosur (Mercosul for Brazil) bloc countries to make up for its struggling vehicle production and sales market.

Tax refunds have been increased to 6.5% from 2% in hopes to increase exports to countries such as Paraguay, Uruguay, and Brazil, the latter being Argentina’s top overseas buyer.

From January-April, auto production in the country dropped more than 30% to 107,000 vehicles and exports fell 11.4% compared to the same period last year, according to local automakers association ADEFA.

Hit with high inflation and a devaluating currency, Argentina has been facing an economic crisis since mid-2018. Currently, approximately 60% of the local car production is exported, of which most goes to Mercosur countries.

Authored by: Daniel Bland