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Argentina’s president passes law to promote car production

Argentine, Argentina’s president passes law to promote car production

Argentine President Alberto Fernández stressed the importance of the law to promote the automotive industry in the country when it was passed.

Automobile production is “the figurehead of the industry as a promoter of employment and work,” the president said at a ceremony in General Pacheco in the province of Buenos Aires (East).

Fernández highlighted the initiative, saying the measure provides “the predictability the country needs to continue growing.”

Argentina's president passes law to promote automotive production. (Photo internet reproduction)
Argentina’s president passes law to promote automotive production. (Photo internet reproduction)

The law, passed unanimously by the Senate on Sept. 1, provides tax incentives for investments in capital goods and infrastructure works made by companies producing cars, trucks, and auto parts.

In his praise of the new law, the president assured that the text “is the result of a consensus of all, because as a bill it did not come from the executive branch, but was agreed with entrepreneurs, workers, and the state.”

The legislation, which declares auto parts manufacturing a strategic sector, provides tax incentives such as exemption from export duties until Dec. 31, 2031, and early reimbursement of value-added tax (VAT).

With the new scheme, the government hopes Argentina, which will export 190,000 cars this year, can increase production by 70% compared to the units produced in 2019, according to Massa, who supported the initiative in Congress.

By the end of 2023, the 690 small and medium enterprises that exist in the country to produce parts involved in the manufacture of a car will have been able to expand 23% of “employment throughout the value chain,” said the head of the economic department.

Through this law, “the automotive sector will become a clear player in Argentina’s industrial policy for the next five years,” Massa said.

The government also approved the Law on Modern Biotechnology and Nanotechnology this Friday, extending until 2023 the scope of a previous decree granting tax benefits to companies that invest in strategic projects for science and technology.

 

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