Both the project called “Bases Law” and the “Palliative and Relevant Fiscal Measures”, presented by the Executive Branch, obtained half a sanction in the Chamber of Deputies last week.
There are ample reasons to argue our rejection from the block of deputies of Unión por la Patria (UxP) to these projects. Given the vastness of the topics covered, and the logical extension of this column, I will focus only on some of them.
In the case of tax projectthe first question that arises is palliative measures for whom? The largest fortunes benefit, while taxes on the working class are increased.
The fourth category is reinstated in the Income Taxwhich is why a large number of workers will pay this tax again.
Under the title of “Asset Regularization Regime” (money laundering) the project includes non-resident subjects. It creates a strange category of “Non-resident human persons who were Argentine tax residents” until the year 2023 inclusive and who have assets and/or economic activity in our country. A striking decision that would seem to have been made “tailor-made” of some individuals or companies. Also, how can anti-money laundering rules be applied in this case?
Another aspect of the official project is the calculation of the tax base, which will not be calculated in Argentine pesos, but in dollars at the “regularization” exchange rate that the Executive would set. A very broad delegation of powers to the PENin addition to the fact that he could modify the value of the taxes at his discretion.
The other peculiarity of this section is that it excludes public officials who have served for the last five years, when it is most common for them to be ten or more. All or almost all the people who participated in the presidential administration of Mauricio Macri.
The modifications proposed on the taxes on personal property, which would imply in a few years the practical elimination of this tax which, although it could be improved, turns out to be one of the most progressive. This would occur since it proposes to reduce the rates of the largest scales gradually until reaching a single rate in 2027 (0.25%). By then, the tax’s progressivity will be completely removed because all affected subjects will pay the same, regardless of the value of the goods and whether they are in the country or abroad.
But, furthermore, within the framework of a government administration whose main axis revolves around fiscal balance based on the adjustment of spending, this tax modification would imply an even greater cut since it would generate a drop in collection.
Finally, one of the many questionable aspects of the commonly called “Bases Law” is the creation of the Incentive Regime for Large Investments (RIGI). It is aimed at mainly favoring primary sectors of the economy through various fiscal policy tools, such as tax, customs and exchange benefits. Among them, Exporting companies are assured of the free availability of foreign currency and that they can sue the national State before the ICSID. An international organization that, according to experience in our country, has always benefited multinationals.
But, in addition, the project’s articles does not establish incentive policies for the industrial sector and SMEs in particularr, which are the sectors that most need to be developed in our country and that are suffering the consequences of the current adjustment.
For the arguments presented, and many others, both the draft “Bases Law” and the “Palliative and relevant fiscal measures” are unacceptable. They aim to favor certain concentrated sectors to the detriment of workers, who would be exposed to a greater tax burden, while an economically privileged minority would benefit, without even the State requiring productive investment, the promotion of an economic sector or a branch of activity. They do not result in an economic benefit for the entire population, they impose extreme regressivity and advance a large number of rights consecrated years ago in our country.
National Deputy Union for the Homeland
President Solidarity Party
Source: Ambito
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