He Government regulated the increase in the rate of the tobacco tax, which was raised from 70% to 73%, which will impact the sale price of cigarettes to the consumer. The decision has another side: it is a direct blow to the privileged position held irregularly by the businessman Pablo Otero, from Sarandí Tobacco Company.
Through decree 658 it was regulated how the increase in the tobacco tax will be calculated, which generated strong controversy in the Chamber of Deputies when it was incorporated into the Basic Law. The law also regulates other fiscal transparency measures included in the Bases law.
The decision to incorporate the issue of tobacco was approved with 82 votes in favor, 77 against and 69 legislators from the Union for the Fatherland and the left abstained, since they maintained that it was a “bidding between big businessmen”.
The Government maintained that it is necessary “to provide certain guidelines to the update mechanism” provided in the tenth paragraph of the unnumbered article incorporated after article 28 of the same law, taking into account the date indicated therein.
It was noted that when The sales price reported by tobacco companies does not constitute a suitable basis for the purposes of determining the taxable value, as it is at least 20% lower than the price arising from the survey carried out by the AFIP It will be appropriate to use the price determined by that body, except when companies “conclusively prove that it is a market price.”
VAT: how the tax will be updated
It also establishes that the AFIP will update the amounts in the months of January, April, July and October of each year, considering, in each case, the variation of the Consumer Price Index (CPI).
In addition, it establishes that when invoices or documents do not express the normal market value The AFIP may “estimate them ex officio” in the case of items taxed at the consumer sales price.
Another point is that when no declarations have been submitted or are contestable, the AFIP will proceed to determine the liquidation of the tax ex officio.
He also points out that The tax authority may make the determination by calculating the sales made by the taxpayer based on any index it can obtain.
Last week the AFIP had already announced a new application for the payment of the tobacco tax, According to the increase provided for in the Bases Law, the rate on the consumer sales price was increased from 70% to 73%.
The tobacco tax that complicates matters for Pablo Otero
The internal tax on tobacco is the one that Tabacalera Sarandí, from Pablo Otero, does not pay for having a precautionary measure in its favor. Thanks to that, the producer of brands such as Red Point, West, Master and Kieldoes not pay the State billions of pesos in taxes, and also takes advantage of the opportunity to gain market share thanks to the fact that it sells at a lower price due to this evasion.
Otero has managed to maintain market conditions that favor him, allowing him to absorb approximately 33% of the cigarette market. The businessman maintains that his company should not pay the minimum internal tax on cigarettes because it would be unfair given the economic capacity of the large tobacco conglomerates in Argentina.
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Pablo Otero’s companies
Pablo Otero and his family own at least 19 companies around the world. In Argentina alone, they control Tabacalera Sarandí and Grupo Madero Sur, Global Race (linked to motor racing), Punt Vermell (show production) and Crossfinder (consulting and IT services).
Many of the companies are incorporated in the United States, Brazil, Panama and Saint Kitts and Nevis, where he also owns, together with various members of his family, several properties.
Brazil is one of the key centres of their investments: there they have the company Mercicler Importadora Ltd, founded in 2004, with which they are dedicated to the trade of tobacco and alcoholic beverages. Curiously, the address reported as the headquarters of the firm is a vacant lot in the city of São Paulo. Another striking fact is that several of their Brazilian companies were founded with the offshore company Centauro Mobility LLC, based in Charlestown, Saint Kitts and Nevis, considered a tax haven.
Together with Centauro Mobility LLC, Otero bought several companies in the United States, especially in Miami, and has a penthouse in Marina Palms Residences South and another in The Harbour South Condo.
Other companies there include Grupo Madero Sur Corp., Costa Brava Realty Corp, Auriga Holding Investments, Zona Sur LLC, Limitless Boundary USA LLC and Proterra Food Trading.
Source: Ambito
