Horacio Rodriguez Larreta introduced a bill with a sharp decrease in the rates of the Tax on Gross Income to different productive sectorstaking another step on the right path started by the 2017 Fiscal Consensus.
It did so accompanied by productive, business and union sectors, such as the Argentine Rural Society (SRA), Argentine Rural Confederations (CRA), the Argentine Industrial Union (UIA), the Argentine Chamber of Construction (CAMARCO), the Federation of Commerce and Industry of the Autonomous City of Buenos Aires (FECOBA), the Construction Workers’ Union of the Argentine Republic (UOCRA), the Argentine Union of Rural Workers and Stevedores (UATRE); pre-candidates for Head of Government of Together for Change and legislators.
This is a new measure of economic relief, after it was decided to eliminate the Stamp Tax on credit cards, and the proceeds from this tax were returned to the residents, after the Court’s ruling that endorsed the claim of the city.
The bill to reduce Gross Income rates was prepared through work carried out with different economic actors, taking into account the characteristics and needs of each sector, with the aim of encouraging investment and generating employment.
The details of the bill
During 2018 and 2019, the City carried out a process to reduce the Gross Income Tax rates for the productive sector, measures that are still in force today, within the framework of the 2017 Fiscal Consensus.
In this sense, the bill that will be sent to the Legislature today contains the following proposals:
- In the case of the Manufacturing Industry, it is encouraged to reduce the rate of Gross Income by 33%, from 1.5% to 1%. Within this category, the items Food and Beverages, Clothing and Footwear, Pharmaceutical Products, Automobiles, Metallurgy and Iron and Steel, and Home Appliances, among others, stand out.
- For the Construction sector, the drop will be 20%, going from 2.5% to 2%. In this category, the items Infrastructure, Installations, Construction Materials, Buildings and Hydraulic Works, among others, stand out.
- The 0.75% rate that the Primary Sector has today will be completely eliminated. In this group, the items Livestock, Agriculture, Fishing and Hydrocarbon Extraction, among others, stand out.
The project proposes lowering the rates for these primary and intermediate sectors, since it is precisely at these initial levels of the production chain that the weight of Gross Income has the greatest impact, which -due to its cascade effect- ends up making the final price of the product more expensive. .
The fiscal effort that will be allocated to implement this reduction of Gross Income rates to these productive sectors will be $38,056 million.
Likewise, the City promised to lower the rate of Gross Income to financial instruments, which should translate into a reduction in the financial cost of loans that both the productive sectors and the general public can take in the future, if the national government pays in cash the ruling of the Supreme Court for the co-participation that favored the district of Buenos Aires.