The Government is analyzing the possibility of extending a tax to banks and raising a tax on online gambling with the idea of raising, during the coming year, the necessary funds to deal with the Supreme Court ruling that ordered the restitution of part of the co-participation that the Nation had taken from the City of Buenos Aires.
This possibility is currently being considered in the Ministry of Economy, led by Sergio Massa. For the Tigrense, there are two preconditions to advance. That the head of the Buenos Aires government, Horacio Rodríguez Larreta, eliminate the transitory tax on credit cards and liquidity bills (leliq), and secondly, that the opposition support the idea of the Government in an agenda to debate in the extraordinary Congress, which could be in the second half of January 2023.
In the Palacio de Hacienda they will have to face the payment of $200,000 million annually to comply with the Court’s sentence. The estimate is that, with the increase in tax pressure, it could reach $140,000 million. The rest should be provided by the Treasury. However, a final decision has not yet been made. The project being studied by the ruling party is to extend the current gross income tax charged by banks for the interest on leliq, which would be taxed but with a lower rate than the current one, and compensate for the lack of funds with a higher gambling tax on-line. In tune, Rodríguez Larreta should cancel his tax on leliq and cards.
The increase in gross income for the leliq and the game that the economic team thinks would thus work as a mirror of the decision that the City made at the end of 2020, when The existing exemption was eliminated and the gross income tax on leliq and Central Bank (BCRA) passes was temporarily raised to 8%. It is a tax that was already collected in several provinces. In addition, Larreta then applied a stamp tax (1.2%) to credit card purchases (a tax also charged by other districts). This occurred after in September 2020, Alberto Fernández took away from the Buenos Aires government a portion of co-participation (first 1.18% and then 0.92% more) to pay the salaries of the police in the province of Buenos Aires that governs Axel Kicillof.
Larreta’s decision sought to offset the adjustment from 3.5% to 2.2% of federal funds, which fell further (to 1.4%) after a law enacted in Congress, that set a limit for the transfer of resources in concept of security (today some $4000 million arrive for these expenses, according to sources from the Buenos Aires government). The Court now ruled in favor of the Buenos Aires administration and established that the Government should give it -without affecting other provinces- 2.95%. First, Fernández -with the support of several governors- said that it was impossible to comply with. He then backtracked and assured that he would pay with bonds. Now, the economic team is working on a solution so that, within next year’s budget, there is the possibility of paying in constant and sound pesos.
Last Friday, the government of Rodríguez Larreta sought in extraordinary sessions to approve the lowering of “transitory” taxes, but failed to obtain the required 31 votes, since Kirchnerism did not give its support. There, the head of government sought to eliminate, as promised, the tax on stamps and lower the gross income of the leliq from 8% to 2.85% (it does not go to 0% because the Court, in its ruling, did not restore the 3.5% that the City requested but 2.95%).
Although the Minister of Economy did not rule on the Court’s ruling, as reported, believes that a definition to modify the federal co-participation would require an agreement with the provinces. On the other hand, Massa considers it “strange” that the Court makes room for a precautionary measure and does not give an opinion on the substantive issue.
In addition, and as a situation related to his work at the Palacio de Hacienda and the need to seek fiscal order, he criticizes that the ruling is not contemplated in the 2023 budget that was approved by Congress, which now leads him to the analysis of mechanisms to compensate the district led by Larreta. However, at least in the last hours, he was satisfied that the Government has shown its intention to comply with the Court’s ruling, something that was not clear once the sentence was known.