by Governor Axel Kicillof had to reduce the claims to increase provincial taxes and reduce the projection of expenses in the next year of administration, to obtain the endorsement of the opposition in the treatment of the tax law.
After an intense week of negotiations, discussions and cross negotiations The opposition put a cap on the increases that the province will charge in 2024: up to 200% in real estate (rural and built, that is, those paid by the countryside and the Buenos Aires owners).
Also There will be a 200% ceiling for the tax on automobiles (patents) and the authorities will be able to “adjust the bills for inflation” that reach taxpayers every three months
The Legislature debates this Thursday – in a double session of the Senate and Deputies – three key laws that the government requires to face the next fiscal year: the tax law, the emergency laws and the authorization to obtain debt for 1.8 billion dollars.
In the original proposal, the Ministry of Finance set increases of up to 300% for rural real estate items with high tax valuation (more than 39 million pesos). There were four categories of adjustments: 140% for the lowest ratings; and in a staggered manner there were increases of 170; 240% and the ceiling corresponded to the owners of large stores.
The agreement that was voted on Thursday night unified the maximum category by 200%. Separately, Kicillof had to postpone the project to create two state entities linked to health: a drug manufacturing laboratory and the Buenos Aires health emergency company.
The Public Limited Company model was proposed with majority state participation, so that the province had its control, Minister Nicolás Kreplak had explained. Both were left out of the discussion.
“It cannot continue expanding the structure of the State, while asking for an enormous effort from taxpayers,” argued sectors of the opposition. Last week, Kicillof obtained approval of the law that maintains 15 ministries and four secretariats or institutes with the rank of secretary of State in the Government structure. Only the Chief of Staff was deleted, vacant since the resignation of Martín Insaurralde, who left office after the scandal over the photos on a yacht in the Mediterranean.
Besides He maintains almost 1,500 political positions (directors and undersecretaries), almost double the number when he served in 2019.. “We have the obligation to grant management tools to the government, but we must discuss how the resources obtained from taxpayers are used,” said deputy Pablo Domenicini (UCR) in the debate.
Kicillof has a complex scenario for the start of his second government in the Province. Without a guarantee of obtaining discretionary funds from the Nation, as anticipated by President Javier Milei, the provincial coffers would be left without the flow of 620 billion pesos that Alberto Fernández sent in 2023.
In 2024 there will be no budget because “the macroeconomic parameters and forecasts at the national level are missing,” the technicians explain. Milei will not have the law of laws either. Then the forecast voted on a year ago will be extended.
The Minister of Finance, Pablo López, sought to reinforce the contribution of “property taxes” on the total collection. He considered his proposal to be progressive: “The vast majority will have increases below the inflation rate, that is, a fall in real terms. Only 8% of the items, the largest and most valuable properties, will pay in line with inflation,” he stated.
“Equity” (real estate and patents) represent only 8% of Buenos Aires’ own revenue. But they have a high impact on the population. In 2023, Kicillof obtained almost 200 billion pesos from the tax on properties and 140 billion pesos from cars.
But the real tax income is gross income. There the Collection Agency (ARBA) obtained almost 2.3 billion pesos in this year. There will be no adjustments to the rates that merchants, industrialists and the self-employed pay. It is a charge that taxes between 0.75 and 5% of the total turnover of most productive, industrial or commercial activities. With the highest burden on banks and telecommunications (8%) and the highest for gambling: 15%.
While one chamber debated taxes, the other analyzed emergency laws and debt. Then the process would be reversed. There was also a transfer there: Kicillof wanted the emergency to be extended for two years in “public safety, politics and prison health; infrastructure, habitat, housing and public services; administrative and technological; and social, economic, productive and energetic in the area of the province of Buenos Aires.”
The agreement was that it would be for one year. “The provincial government has already been in emergency for four years,” argued the bloc of Pro senators led by Alejandro Rabinovich (Pro) from Mar del Plata. In that package the possibility of creating new public structures was prohibited.
The governor sought to show a difference with national decisions. While Milei shrinks the State, the Province maintains or increases benefits. But it did not pass the legislative filter.
Even though UxP has the first minority in Deputies and the Senate. The ruling party needs to negotiate to achieve a quorum in both chambers and – in the case of taxes – two-thirds of those present for its approval. It was on that path of political negotiation that Kicillof had to give in.
The interests of the mayors also entered into the negotiations. The government agreed to establish a “freely available” fund to send to the 135 communes. It is to replace the Municipal Infrastructure Fund that was in the 2023 budget. It was a claim from the radical mayors. Those of the Pro and some Peronists also wanted the cancellation of a debt they have with the Province for the payment of 60 thousand pesos to municipal employees, which the minister-candidate, Sergio Massa, arranged in the middle of the campaign.
La Plata (Correspondent)
