Argentina to scrap taxes on locally made electronics gradually

Thursday, November 30, 2017

Argentina's government published a decree on Wednesday that will kick off a gradual drop in duties on electronics goods produced locally.

The publication of decree 979 in the official gazette, could be a stay of execution for the assembly of electronics goods in the province of Tierra del Fuego in the long term, which has benefitted from tax breaks, obliging OEMs to ship components down to the province, assemble them, and ship them back north again.

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While the decree cuts the tax on assembly in Tierra del Fuego to 0%, the duty on electronics produced outside the province will fall gradually to 0% in 2024 starting with a drop to 10.5% in 2018.

The decree affects mobile phones, air conditioning systems, televisions and microwave ovens amongst other items.

Production minister Francisco Cabrera, said that such a decree would have been "unthinkable" several years ago, given the protectionist policies of the former government of Cristina Fernández de Kirchner.

He said, "the agreement seeks to reduce the cost of technology, which affects the whole economy, whilst protecting jobs and at the same time encouraging the province to diversify what it produces."

A recent report by the GSMA claims that cutting taxes on Argentina's mobile sector will lead to greater digital inclusion and economic growth.

To help the industry in Tierra del Fuego survive, the government is introducing a series of measures to improve the level of productivity and competitiveness of the industry in Tierra del Fuego, including a plan to reduce customs duties, reduce the cost of maritime transport and improve security measures on terrestrial routes.

Efforts will also be made to crack down on products produced illegally in the province. Manufacturing licenses will be automatically renewed each year.

Earlier this year, the government slashed the 35% tax on PCs and tablets.