Argentina: President Christina Fernandez drops grain tax hike
In reaction to yesterday´s decision by Argentinean Congress to reject a bill on grain tax hike, President Christina Fernandez de Kichner decided to drop such proposal. This decision is a double defeat for the current government. On one hand, it represents a forced bow to the opposition land owners. On the other hand, it revealed the fragility of the Presidency of Christina Fernandez. Her own Vice President Julio Cobos, casted the single decisive vote against the bill.
Argentina drops grain tax hike
Cristina Kirchner, the Argentine president, has cancelled plans to increase taxes on soy exports after the senate voted against the bill. Thursday's rejection of the hike, which had prompted widespread protests from farmers across the country, has been seen as political setback for Kirchner.
The senate vote itself was not enough to cancel the tax hike because it has been issued by executive order.
Julio Cobos, the vice-president, cast the deciding vote against the government-backed bill to break a 36-36 tie in the senate, sparking outrage among the president's allies. Kirchner had sent the proposal to congress after months of strike action by farmers following her initial decree raising taxes on soy and grain exports issued in March.
The bill passed the lower chamber of deputies on July 5 where it faced stronger than expected opposition. It proposed to raise grain export tariffs from 35 to 47 per cent, on a sliding scale linked to global prices. The vote came after rival protests for and against the bill on Tuesday, with hundreds of thousands demonstrating in the streets. With the vote carried live on national television, hundreds of opponents of the bill gathered in the Palermo district to watch the proceedings. They erupted in celebration when the bill went down to defeat.Farm leaders welcomed the tax hike cancellation."The conflict is over," said Luciano Miguens, head of the Argentine Rural Society,
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