The United States Chamber of Commerce in Argentina (AmCham)which brings together American companies based in Argentina, raised in a statement a series of dissents on the final wording of the Bases law and the fiscal package and they offered a series of reflections and proposals that they consider fundamental for the approval of this regulatory framework.
American companies considered insufficient in central chapters such as labor and the investment regime, while they criticized the increases in mining royalties and pointed out a series of points that they believe can contribute to the improvement of the regulations.
Criticisms of the Tax Package on Income and Personal Assets
In tax matters, that is, with regard to the tax package, from AmCham, observe “with concern” the rejection of two key aspects of the sanction, such as the changes proposed by deputies for the determination of the Personal Property Tax (Title III) and the restitution of the fourth category of the Income Tax (Title V).
“In the case of rejection of the reinstatement of Income Taxthe fiscal resources of the State are cut, both provincial and national, which are essential to achieve the objective of fiscal surplus,” they point out from the Chamber. And they recognize that there are taxpayers who benefit and others who may be harmed, but they point out that ” What must be taken into account is that the current legislation presents multiple inequalities”, so that They ask the deputies to insist on the original text with half a penalty.
Regarding the tax on Personal Assets, criticize that the current wording affects the middle class, and they denounce that this “imposes an almost confiscatory nature.” For this reason, also in this case, they ask the deputies to include the proposed changes, such as advance payment over five years, the progressive reduction of rates, the update of the non-taxable minimum and the deductible value of the dwelling house, as well as the reduction of the rate for compliant taxpayers.
“We do not understand the exclusion of these measures, given that the income from this tax is not significant for the fiscal coffers and would represent an incentive for taxpayers to reside and invest in Argentina,” AmCham points out.
They highlight the need to sustain the fiscal surplus
Another negative aspect that they point out is the elimination in the original project of article 111, which enabled the Executive Branch to increase public resources by up to 2% of GDP through the elimination or modification of exemptions, tax expenses and tax benefits. “This decision once again deprives the Executive Branch of a crucial tool to sustain the fiscal surplus. We are surprised that this decision was voted unanimously by the LLA senators, a kind of contradiction for a government that highlights among its basic pillars the reestablishment of fiscal balance,” they say.
AmCham’s criticism of the limitations of the Executive Branch
On the other hand, with regard to the Base Law, they indicate that The power of the Executive Branch to intervene in public organizations is limited and prohibits the dissolution of entities linked to culture. And they consider that the scope of administrative deregulation should be much broader to substantially improve the functioning of public organizations and make them efficient.
The Labor Reform leaves US companies dissatisfied
Refering to Labour reform, They highlight that the contents of the half-sanction of the Labor Reform were maintained, with modifications in the treatment of special agreements for commercial travelers and the elimination of fines or infractions for those who have not properly regularized their employees. However, they consider that “the final wording still does not generate the minimum conditions necessary for a substantial increase in employability, nor for a significant reduction in informality.”
RIGI approval
Regarding the approval of the Incentive Regime for Large Investments (RIGI), from AnCham They believe that it is an instrument for future relevant projects. However, they criticize the limited list of industries covered (forestry industry, infrastructure, mining, technology, tourism, steel, oil and gas).
Privatizations, on AmCham’s radar
And, at another point, they talk about the privatization of public companies. “Of the initial package of 41 companies that were proposed for privatization, the text finally approved by the Senate only contemplates the total privatization of Energía Argentina SA (Enarsa) and Intercargo,” they say. For American companies, this final version of the bill significantly restricts the Executive Branch’s ability to conduct a comprehensive review of public companies. “Many of these companies have been singled out for their loss-making nature, their inefficient management or for pursuing objectives that are inappropriate or unjustifiable,” they say.
He says that the pension reform has little flavor
On the other hand, they maintain that “a extensive, comprehensive and comprehensive pension reform must be discussed in Congress”, since they mention that specific issues such as the reconfiguration of the pension moratorium were eliminated from the Bases Law, removing Title VIII that repealed the possibility of requiring the pension moratorium until March 2025. In addition, it is The point that sought to create the “proportional retirement benefit” for 65-year-old people who have not completed 30 years of service was dispensed with.
Criticism of mining royalties
Another article modified by the parliamentary negotiations was the increase in cap on mining royalties from 3% to 5%. According to what was resolved by the Senate, this increase cannot be applied retroactively, affecting projects that had not started the exploitation stage before the rule came into effect.
The baton in the hands of the Deputies and the request to go deeper
And they put some pressure on Congress by pointing out that, “Now, it will be the turn again of the Chamber of Deputies, that must decide whether to accept in their entirety the changes introduced by the reviewing Chamber or insist on the original version that obtained half a sanction” and they add: “We fully trust in the commitment of all the deputies to endorse those measures that aim at the transformation of Argentina towards a viable country”.
Although they highlight that the approval of these regulations in the Senate marks an important milestone, overcoming a new obstacle and is an advance that gives the Executive Branch political support, they warn that “this is not enough” and believe it is still necessary to implement changes in the regulatory frameworks through a reform process that must have the support of the country’s main actors (Congress, academics, union members, businessmen, etc.).
From AmCham they consider that “t“Comprehensive and profound transformation reforms are still pending to make Argentina a viable country.”
Source: Ambito
