Argentina proposing tax breaks for oil and gas companies
This article is extracted from International Oil Letter, Vol 24 issue 46, published 24 November 2008.
Argentine President Cristina Fernandez de Kirchner has introduced a new program to give tax breaks to oil and gas companies that either increase oil output or boost refining capacity. “Petroleo Plus" and "Refinacion Plus” are efforts to reduce the country's fuel imports and reverse 10 years of declining production through increased exploration. While full details are yet to be made known, the proposed program includes tax breaks based on production increases and job creation.
Under the program, energy firms that increase investment will be given tax breaks including credits against the export tax that determines the effective price cap on oil in the country. The credits could also be used for amortization of the IVA or value added tax and includes a special tax regime for small refiners with plans to expand. Kirchner says the tax break plan will not cost the government because it will reduce the federal subsidy on fuel imports and help the trade surplus. Minister of Planning Julio de Vido estimates that the program will create a direct investment of US$ 8.57 billion in the energy sector.
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