As Ámbito exclusively anticipated, the meeting between the Chief of Staff, Nicolás Posse, and the Minister of the Interior, Guillermo Francos, and the provincial leaders was the framework for the Government to raise the need to obtain a majority consensus on the main points of the “Law of Bases and Starting Points for the Freedom of Argentines”, known as the omnibus law. Among the changes is a modification of the mobility formula by which retirements are adjusted.
During the meeting, the Government proposed promoting a package tax relief which includes a Tax Moratorium, the Modification of the Internal Taxes on Tobacco, and the Elimination of the Tax on the Transfer of Real Estate of Individuals and Undivided Estates.
Also, it was discussed including changes in the Personal Income Lawthe elimination of certain exemptions that apply to it, and the modification of the Monotribute, increasing the scales of billing amounts and tax rates. Finally, the promotion of the Consumer Tax Transparency Regime was proposed.
New omnibus law
The new project of omnibus law includes 9 chapters ranging from the Emergency Law, Labor Money Laundering, Privatization, Economic Deregulation, and pension issues, among others. Whilethe modification of the Income Tax would be presented separately.
The central axes of the new bill include: the declaration of Emergency for administrative, economic, financial and energy aspects for only 1 year, as he was able to access Ambit.
One of the Government’s concerns is to advance reform the State with the slogan of freeing citizens from its weight. In this chapter, articles are proposed referring to Parliament delegating to the Government the tools to be able to in the central or decentralized Administration: reorganize; merge, transform, partially or totally dissolve organs or agencies of the central or decentralized administration created by law or regulation of equivalent rank (universities, CONICET and INTA are excluded).
Trust Funds are also included. This point was what led the president Javier Milei made the decision at the time to withdraw the project, after the defeat during its treatment in the Chamber of Deputies.
At this point, the new project hopes that the Executive Branch can modify, dissolve or determine the extinction of public trusts and that the funds go to the National Treasury until the next Budget law is passed.
Labour reform
One of the issues considered key to economic reactivation is job modification, In different aspects. The new omnibus law contemplates in the Chapter IV the treatment of Public Employment. Meanwhile, Chapter VI contemplates the “Promotion of registered employment” and establishes the creation of a “labor laundering” regime.
Pension reform
This point is key to being able to update retirements. He Chapter V foresees the modification of the mobility of pension benefits and the modification of the current pension formula.
The proposal is a monthly adjustment for inflation plus 10 percentage points of recomposition for the previous period. Surely this proposal will be resisted by several legislators who aspire to consider the recomposition of the months of highest inflation.
Also included is a chapter of Consolidation of Public Debt and the State will retain the shares of companies within the Sustainability Guarantee Fund (FGS) of the ANSES.
Contracts
Likewise, there will be a modification to the current contracts and transactional agreementsthat is, to provide for emergency reasons, the renegotiation or termination of contracts of certain characteristics and amounts; and regulate the possibility of entering into transactional agreements.
As well as a chapter referring to the delegation to the Executive Branch of the modification of regulations on private economic activity that result in an increase in its costs.
Also contemplated is the chapter of Energy, the Hydrocarbons Law, natural gas and energy transition and, to promote investments, a Incentive Regime for Large Investments.
What does the Government expect from the negotiation with the Provinces?
The National Government was maintaining central aspects of the omnibus law following the president’s instructions Javier Milei to the chief of staff, Nicolas Posseand to the Minister of the Interior, Guillermo Francos (the interlocutors for the Executive Branch), as discussed in the Casa Rosada.
In this sense, Milei continues to insist that has little confidence in the possibility of an agreement. Yesterday, in the prelude to the Executive’s meeting with the governors, he made statements pointing out that he had been wrong in considering that the provincial leaders were going to negotiate in good faith.
According to the interpretation of the central administration, the provincial governments committed “a mistake” believing that they had enough strength to overturn the President’s decision not to send them funds if they did not support the reforms promoted by his administration. Milei’s response to requests from the interior was “sit on the box to the surprise of many”they say in the environment of the first president.
Indeed, in February the provinces received only $18.25 billion in concept of discretionary transfers – an 88% cutdiscounting inflation, in relation to the same month last year -, according to data from the Argentine Institute of Fiscal Analysis (IARAF).
When automatic transfers are added, in the accumulated to the first two months of the year transfers through co-participation reached $4,500,000 million, with a real drop of 15.4% compared to the same period last year. This would imply the lowest real amount for the first two months of the last 9 years, according to the IARAF.
To the contraction of transfers by co-participation must be added the falls that the provinces are suffering in the collection of their own income, derived from the sharp contraction of economic activity and the fall in purchasing power. In this context, governorates are finding increasing difficulties in raising the tax burden.
President Milei’s position is that “He is not willing to give in on what he considers the fundamental changes that the country needs“, they point out in their environment. They also argue that it will be very difficult for governors to oppose demands that society voted for in the last elections.
Source: Ambito
