Neuquén joined the RIGI and offers incentives for investments in Vaca Muerta

In this way, the province generates local incentives to promote investments lower than those contemplated in the national regime through the program “Invest in Neuquén.”

What the deputies who voted in favor said

By acting as a reporting member, Ernesto Novoa (DC-Community) stressed that the law implies maintaining, for a period of 30 years, the tax and fiscal scheme in force until 2023 for accessions to the regime, which grants “legal security” to both national and foreign investors. In that sense, He said that the rule implies “not changing the rules of the game” in a country that for years “ran the bow” from place to place.

Marcelo Bermudez (PRO-NCN) highlighted that the RIGI stipulates tax exemptions to attract national and foreign investments; and pointed out the benefits of fiscal stability for the promotion of the industry and the generation of employment. “It is a gesture to new investors that we are not going to change the economic equations in terms of tax increases,” he stated.

For the same block, Veronica Lichter mentioned that the national economy grew only 0.5% during the last twelve years. Among the main causes, he mentioned the “excessive increase” in public spending, of around 27%, according to what he reported. the high debt ratios and the increase in the tax burden.

image.png

From Comply, Brenda Buchiniz stated that Neuquén joins the provinces of Mendoza and Río Negro that already joined the national regime and with which Vaca Muerta shares. He highlighted that the law that grants tax, customs and exchange benefits to large investors represents a very important step but warned that progress with legal certainty remains pending through the sanction of a “anti-picketing” law.

What did the deputies who voted against say?

Lorena Parrillifrom UxP, emphasized that the measure does not contemplate SMEs but favors, in tax terms, large companies since it involves minimum investments of 200 million dollars. “There is no equity,” he warned, while ensuring that it constitutes “the statute for 21st century colonialism” as it represents “a surrender of our sovereignty.”

image.png

The provincial deputy for the PJ Darío Martínez expressed that “It is harmful to all Argentines, the national economy as a whole and, in particular, to Neuquén and the people of Neuquén.”

The Justicialist deputy and former Secretary of Energy of the Nation explained that this is not a criticism of the investment regime, but rather of the particular scope that this specific RIGI will have on the national and Neuquén economy. Martínez said that the regime grants ultra benefits to companies and consolidates an economy based on primarization, on the export of raw materials with no or little incorporation of national added value, and simultaneously attacks the national industry and its development. “A model of a country in which the vast majority of Argentines do not fit, will not find work, nor will they be included,” he added.

In this sense, he pointed out that the RIGI is detrimental to Neuquen and especially for local SMEs that provide goods and services to the hydrocarbon industrybecause it contains rules that disregard and nullify the obligation to prioritize the hiring of Neuquén workers and companies in the benefited projects.

“With this accession, our laws for the protection of Neuquén companies and workers or Compre Neuquino are effectively repealed, which weakens the job possibilities of Neuquéns and the development opportunities of provincial companies.”, he stated.

image.png

Furthermore, Martínez stated that the RIGI can be detrimental to the gas price at wellheadwhich will affect the calculation of royalties from Neuquen. “The 2025 Provincial Budget foresees that 55% of the treasury resources will come directly from hydrocarbon exploitation, via royalties and Gross Income paid by the producers, with indirect phrases and parables they are announcing to us that they intend a very low value for natural gas. Dead Cowintending to use it as an adjustment variable for their calculations and their profits,” he explained.

“They let it be known that the value of gas at the wellhead must be less than US$1.75 per million BTU. Half the price it has today in the domestic market, established in the Gas.Ar Plan for which royalties are paid. Operations of this type at this price will have a full impact on the collection of the Provincial Treasury and on the possibility of materializing a development plan and increasing well-being for the people of Neuquén,” he said.

Likewise, Martínez said that the RIGI is also harmful because it allows and guarantees for 30 years that the beneficiaries freely dispose of the foreign currency they obtain from their exports, without any need to bring it into the country. “That is to say that companies will literally keep all those foreign currencies abroad without any scale in the Central Bank or effect on the Country’s Reserves. RIGI itself guarantees that there will be no rain in Argentina of dollars from new and fabulous exports as announced.”he added.

In that sense, the Justicialist deputy explained that in the case of LNG, the transformation of gas to export it at more than three times its value in the domestic market, would be a great business for the country, “as long as a significant part of the dollars generated by these imports enter our Central Bank, the services are provided by Argentine companies and the goods, machinery, and tools necessary for their operation are increasingly manufactured with technology developed in Argentina, creating quality jobs,” he added.

“But the RIGI guarantees that all this does not happen, since it removes and guarantees all obstacles to the importation of goods and services destined for these projects, and to use foreign currency abroad, with an almost ridiculous clause of using only 20% of national suppliers, much lower than the current participation of local suppliers and manufacturers of goods and services to the hydrocarbon industry,” Martínez concluded.

From the left benches, Gabriela Suppicich (FIT-U) questioned the fact that tax exemptions are granted to large companies and not to the working class, and criticized financial deals with foreign companies. Your pair of PTS-FIT-U, Andrew Whiteconsidered that this is a “deepening of the looting” and questioned the use of development as an argument to justify accession.

Neuquén: what the local RIGI consists of

When sending the project, the governor argued that the Province “is faced with the challenge of revitalizing traditional sectors such as agriculture and livestock, which have seen their production decline in recent years.” He mentioned as an example a 23% decrease in the fruit area in the last decade.

In turn, he considered that Neuquén “has a unique opportunity to diversify its productive matrix,” promoting growth through investments in emerging sectors such as renewable energy and tourism. “This duality requires a comprehensive strategy that combines the recovery of established activities with the promotion of new sources of development,” he stated.

The proposed rule had been announced by Figueroa after the sanction of the Law Bases and Starting Points for the Freedom of Argentines, that created the RIGI for companies that invest more than US$200,000,000 in the country.

“The RIGI offers a favorable framework to promote the industrial and productive development of Neuquén. However, to make the most of this opportunity, it is necessary to implement a comprehensive strategy that combines the attraction of investments with the development of local capabilities, promoting innovation and the adoption of sustainable practices. In this way, we can ensure that the benefits of a comprehensive regime are distributed equitably and are consolidated over time.”, he noted.

What are the main aspects of the Neuquén RIGI?

• Promotion of Economic Development: The Law seeks to promote investments in key sectors such as industry, tourism, agricultural activity, and renewable energies, among others, with the aim of diversifying and strengthening the provincial economy, as well as promoting the development of Small and Medium Industry. .
• Job Creation: Encourage projects that generate genuine employment, especially in strategic regions, promoting the hiring of local labor and the development of small and medium-sized businesses.
• Environmental Sustainability: Promote sustainable practices, contributing to the preservation of the environment while promoting economic growth.
• Regionalization and Equity: Promote investments that prioritize balanced development in all regions of the Province, responding efficiently to local needs.
• Innovation and Diversification: Promote projects that integrate innovative technologies, develop knowledge ecosystems and expand the productive matrix.
• Collaboration and Coordination: Promote cooperation between municipalities, the provincial government, and the private sector, ensuring a clear and efficient regulatory framework to attract investments

From the Neuquén administration they reported that “all this will be done taking into account the Provincial Regionalization Plancreated by Law 3,480, consolidating a more inclusive, equitable and sustainable Province, where decisions are made jointly and the particularities of each of its seven regions are respected.

The project promotes the creation of the Neuquén Provincial Investment Committee (CPIN), as an Enforcement Authority, made up of officials from the Executive and Legislative Branches, positioning it as a key body to meet the objectives of the Law in an equitable and efficient manner, promoting the economic development of Neuquén with legitimacy and social support.

With the advice of the Provincial Innovation Council, the Executive Branch must approve the “Industrial and Productive Development Plan of the Province of Neuquén” that will establish provincial priorities in sectoral and regional terms.