Monday, 21 July 2008

President of Argentina withdraws tax increase on grain exports

BUENOS AIRES: The president of Argentina, Cristina Fernández de Kirchner, has said that she would revoke tax increases on grain exports, a measure that had set off months of farm revolts, food shortages and nationwide protests.
The move on Friday to revoke the tax increases was a humbling retreat by the president and was necessary to stop the hemorrhaging of her seven-month-old presidency, political consultants and risk analysts said, after the Argentine Senate rejected the plan and Kirchner's own vice president, Julio Cobos, broke a tie to defeat the measure.
Kirchner's government has lost much of its support during the conflict, with her approval rating falling to as low as 20 percent in some polls.
In explaining the decision to rescind the tax plan, Alberto Fernández, the president's chief of staff, said that in a democracy one had to "respect the popular will" and "preserve the quality of institutions."
He gave no indication of whether the government planned to revisit the measure, but he said it was committed to its vision of redistributing income to the lower classes, a justification the government had used for the tax increases.

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