The Government wants milk to pay 10.5% VAT: the top brand sachet would go to $ 67

Experts in reading the fine print warned that in the budget expansion project, the Government seeks to bring to 10.5% the Value Added Tax (VAT) that pays for milk, whether liquid or powder, whole or skim.

VAT is a tribute paid by the consumer and for this reason it will be transferred immediately to the price that averages in the first brands $ 60 a liter and which could now climb to $ 67. In the second brands the sachet ranges between $ 43 and $ 47 and it would reach $ 52.

Héctor Huergo brings the highlights of agribusiness and regional economies.
The radical deputy Luis Pastori did not miss this opportunity: “In the midst of the economic crisis and the sharp drop in the population’s income, a rise of this nature in the price of an article of basic necessity is difficult to accept.”

Pastori is a member of the Budget Committee of the Lower House and pointed out that the practice of implementing tax modifications in the budget law, so common in recent governments, is prohibited. The legislator anticipates a heated debate.

In reality, dairy products always paid 21% VAT, the industry billed it, until, after the defeat in the PASO of last August, Mauricio Macri decided to eliminate that tribute that rich and poor pay equally in an essential food in childhood .

At that time Macri eliminated VAT also for yogurt, rice, sugar, bread, polenta, preserves, flour, yerba, mate, tea and eggs.

Macri’s decree was in force until the last January 1 and Alberto Fernández decided to return to 21%. It was in silence and looking for that the weight of the tax did not fall on the final price. Of course, depending on the place where the sachet was bought.

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In this way, the large stores, which were governed by 21%, were compensated by the government and were indifferent: they did not change the value.

This was not the case for self-services, without compensation from the State. In this case, it was the same dairy plants that made them a bonus so that they did not transfer the tax.

Neither were prices altered in this sector because a high proportion operates in black.

By the way, due to the exceptional nature that the pandemic imposes, it may be strange that the official proposal, which although contemplates applying half the VAT, achieves approval in the Chambers.

On Monday night, nobody dared to calculate how much that 10.5% means in terms of collection, which will bring a few million to the tax coffers if it is considered that the State stops compensating and begins to collect.

A fact: the indisputable leader in that business, La Serenísima, dispatches about 3 million milk sachets per day.

The bill that entered Congress this weekend. It says in its article 18 that the VAT exemption is eliminated “fluid or powdered milk, whole or skimmed milk without additives”. And in article 19 it is established that these products will be taxed with 10.5%.

In this way, it equates dairy products with meat and wheat and their derivatives, which also pay half the VAT rate.

The head of the Cabinet, Santiago Cafiero, had announced that, due to the pandemic and the greater expenses that this emergency demands, he was going to send the House of Representatives a bill to expand the items of expenses and resources until the end of year. The initiative was presented as a “gesture” to the opposition, since it avoided resorting to decrees of necessity and urgency.

At the Casa Rosada they demand prompt treatment. But the opposition has already found an argument to analyze each point slowly. Let’s change and the left-wing deputies let it be known, each one on his own, that it will not be a closed-book approval.

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