“We have decided to withdraw the fiscal chapter of the basic law, in order to accelerate and facilitate its approval,” said the Minister of Economy, Luis Caputo. Thus, the Government announced that it would eliminate the heart of the project, including five key points: the reforms in retirements, withholdings, money laundering, the moratorium and advance in Personal Assets. Also the changes in Profits that had entered Congress this week in a separate law.
As Clarín said, in jubilations and retentions the ruling party was on its way to a resounding parliamentary failure. The comings and goings with officials sent by the Executive and the frantic meetings in Martín Menem’s office – and even in other reserved places – were not enough. The Government was faced with the reality that it would not have the votes, first it decided to postpone the session scheduled for this Thursday until next Tuesday. And in the run-up to the weekend he announced this bombshell.
The news broke on the day that Karina Milei, for the first time since her older brother, set foot in Congress. She met with Martín Menem and his main advisor and operator, “Lule” Menem in the Senate dining room, where they had lunch, and then they went together to the Casa Rosada.
Later, there were calls to the main negotiators of the blocs for the final ratification: “Yes or no: they are going to vote on the fiscal chapter.” They appreciated the sincerity and later Caputo made the announcement.
The six key points
In the speech, Caputo listed the six main points that will be left out.
– Retirement reform: In the original project Javier Milei eliminated the current mobility formula and proposed increases by decree. The opposition rejected it outright and proposed a monthly update for inflation.
The government accepted it but stated that this calculation would only begin to apply for adjustments starting in April. There the discussion became complicated again. The opposition claimed that in this way retirees were harmed because they left out the months of highest inflation. “It does not include the month of January, which can represent 30% of retirees’ salaries,” they explained.
Both the UCR, which has 34 legislators, and the We Make Federal Coalition bench led by Miguel Angel Pichetto and made up of 23 legislators, had made it clear that they would vote against.
– Withholdings: In the first version, Milei aspired to lead all regional economies and industries to pay 15% for export duties. The governors led this battle and stated that they were not going to accept it.
Although the government had backed off from raising withholdings in regional economies, it still maintained increases in industrialized economies and raised soy by-products, such as flour and oil, from 31% to 33%. The dialogue groups, and even the PRO, had announced that they were going to oppose the vote.
– In the case of Money laundering, moratorium and personal assets.The opposition was willing to vote for it although there were still some points to negotiate.
In the case of money laundering, the key point also had to do with the governors. They wanted it to be shared. There had been a meeting with Guillermo Francos that implied that the Executive complied with the request. But later part of that was not translated into the opinion that was signed and the negotiation returned to zero.
In the case of the moratorium, there were no major problems although the opposition demanded that a “prize” be included for good taxpayers.
– Profits: The reversal in the increase in the Profit floor was another key point for the provincial leaders because they also participate. After back and forth, the Government had only sent the project to Congress this week.
He renamed it the Personal Income Tax and it was established for gross salaries from $1,250,000 in the case of singles without children, and slightly less than $1,900,000 in the case of married people with children.
The news emerged on the benches but was well received.