May 24, 2019 / 2:04 PM / 4 months ago

Argentina slashes import taxes for 39 auto parts

BUENOS AIRES, May 24 (Reuters) - Argentina cut taxes on 39 more imported auto parts, the government announced on Friday, adding some digital tech parts to the existing list in hopes of boosting productivity in the vital sector that has weakened during the economic crisis.

The measure announced by the ministry of labor and production is temporary until the local production of the auto parts develops further.

Argentina President Mauricio Macri, facing a rising political challenge ahead of national elections in October, is trying to revive growth to help bolster his popularity with hard-hit and increasingly wary voters.

In July of 2018, Argentina expanded the list of goods eligible for a tax cut of 2.0% to include more than 130 auto parts. After a survey, the list expanded to include pieces for auto parts used in newer digital technologies, the government said.

“This measure arises from the work we carry out together with the private sector to promote the competitiveness of the automotive industry as a whole, and addresses the technological changes that affect the design and development of products,” Secretary of Industry Fernando Grasso said in the statement.

At the beginning of May, Argentina increased a tax rebate to 6.5% from 2% for auto exports to the Mercosur block, which also includes Brazil, Paraguay and Uruguay.

The automotive sector is one of Argentina’s top exporters and a major job creator, employing around 60,000 people last year. Auto production in Argentina fell by 33.9% year-on-year in April. However, it increased 3.7% compared to March, the Association of Automotive Makers (ADEFA) recently reported. (Reporting by Walter Bianchi; writing by Cassandra Garrison; Editing by David Gregorio)

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