By Michael Soltys, Buenos Aires Herald Senior Editor

The new tax on electronic products found enough arguments in its favour to clear the Lower House last week but ultimately it has a broad similarity with grain export duties - i.e. it is a levy on one of the most dynamic and forward-looking sectors of the economy in order to feed an old politics which appeals to those left behind. Superficially, this new burden to the tune of around 30 percent on electronic gadgetry could be defended as a legitimate luxury tax at a time when a huge minority of the population lacks far more basic necessities and when the government's revenue base is under threat from both economic crisis and political adversity. It is, of course, true that this new tax grossly contradicts various government initiatives to incorporate modern technology into education but then anybody listening to a typical mobile telephone conversation in the streets of this city is hardly going to walk away with the impression that they have just been witness to a breathtaking intellectual or cultural advance. Again critics of this legislation could legitimately argue that it will be hard on the regional promotion electronics industries down in Tierra del Fuego but these plants - in most cases the mere assembly of imported parts - should never be confused with a genuine national industry.

Yet when all these arguments have been made, this new tax remains the purest folly in any competitive terms. Just as it is nonsense to tax the farming exports which are subsidized in much of the rest of the world, so is it total lunacy to cripple information technology which everybody calls the key to the 21st century. Social justice might favour the argument that anybody owning a laptop is hardly likely to be a pauper (the same cannot be said for cell phones) and should thus be liable to taxation but it is the sophisticated technology which is needed far more than the mobile telephones and it is this technology which is being the hardest hit by taxation which punishes imports the most heavily.

This in turn allegedly protects a national industry which hardly e-xists beyond regional promotion assembly plants - but an industry which could well exist because the advanced skills already shown by Argentines as users could be applied to production. Yet just as wealth has to be created before it can be distributed, so an industry must be created before it can be taxed.