The “Solidarity, Mandatory and Extraordinary Contribution to help mitigate the effects of the pandemic” is considered by rural producers as an imposition that affects this sector more than any other, because it taxes productive assets, and for which it is already taxed.
“Agricultural activity requires a high need for capital and low income, mainly due to the land factor, but also due to the cost of machinery,” said David Miazzo, chief economist of the Fundación Agropecuaria para el Desarrollo de la Argentina (FADA). And he explained that “this situation leads small to medium-sized producers, as well as rural contractors, easily reaching the minimum level” provided for in the bill that is being processed in Congress and is known as the “wealth tax.” or to “the great fortunes.”
The opinion promoted by the deputy of the Frente de Todos, Carlos Heller, with strong support from the head of the bank, Máximo Kirchner, implies that those who possess assets of 200 million pesos, if the initiative becomes law, must pay for it according to the amounts, from 2% to 3.5% for those who have more than 3,000 million declared pesos.
“It is a very strong tax blow to production, because it affects investment and deepens legal insecurity”, defines the tax accountant Santiago Saenz Valiente. And it takes into consideration that time, due to the evolution of the official exchange rate, runs “in favor of the treasury and against taxpayers.” It is because in principle the last day of last year had been established as the reference date. But later it was modified, so that the “patrimonial photo” is taken the day the law is enacted. That subtlety implies that instead of 3.2 million dollars, the floor of this tax is now 2.4 million dollars. It is because the official exchange rate was 62.5 pesos and today it is 82 pesos.
“Confiscatory and unequal”
For weeks, the entities of the Liaison Table have been questioning the impact on productive assets. “Inequality is raised mainly, because it affects those who take risks by investing in activities that generate work, in the same way as those who choose to have it in a bank abroad,” they raised from the Argentine Rural Confederations (CRA).
“No pandemic enables to violate constitutional guarantees”, are planted from the Argentine Rural Society (SRA), understanding that it imposes an “unfounded unequal treatment because the highest intended taxation is disconnected from the contributory capacity of the person, violates the principle of equality in public charges and evidences an unacceptable fiscal purpose in a tribute ”.
Miazzo added that Argentine citizens who work in rural areas “have a capital with which they produce and that on that production they pay export duties, income tax and other taxes; but also now they would have to pay a new tax on that same capital that they use to produce. This is something that a more logical tribute like the personal property tax recognizes ”.
And he related it to another central accusation: confiscation, “because in many cases, income can be less than the sum of the personal property tax and the wealth tax, causing the producer to reduce his capital to the purposes of paying the tax ”.
A report from the Institute of Economic Studies of the SRA considers that it is a highly questionable tax from the constitutional perspective, so that taxpayers will have well-founded reasons to judicially reject its enforceability. They believe “regardless of their name, it would constitute a new surtax (in principle extraordinary) of the Personal Property Tax, which would clearly show its confiscatory nature by absorbing an inordinate proportion (if not all) of the income generated by the encumbered assets. Adding both taxes in the general case would reach assets with an aliquot between 3.1% and 4.3% if they are in the country, while if they are abroad, the aliquots can reach between 7% and 8 %. Since market interest rates today are below these levels, they will necessarily affect a part of the asset ”.
In the same sense, Saenz Valiente, underlines that “the overlap with the personal property tax, leads to the rate of this tax reaching confiscatory limits”. And it considers that “a judicial claim may be presented with a precautionary measure to avoid its payment and then through an expertise to demonstrate the effective confiscatory nature of this tax burden. The last word will be the Supreme Court of Justice ”.
From the SRA they also point out that “it is illegally retroactive when taxing a taxable event prior to the existence of the Law”, they warn that “it affects property rights because the tax reaches a taxable capacity on which the taxpayer has already paid the respective taxes, extinguishing its link with the Treasury in that regard ”.
They also question the “unclear, and discretionary, in the application of the resources obtained by this tax.” The planned destinations are: 20% to the purchase of medical equipment; 20% for subsidies to MSMEs; 20% Progresar scholarship program; 15% Inhabitants of popular neighborhoods (RENABAP); 25% exploitation of natural gas through IEA SA in agreement with YPF SA.
“Boycott” Heller from the interior Producers from different provinces promote a “boycott” of Deputy Heller, through the closure of accounts at the Credicoop Bank, chaired by the legislator. It is a financial entity closely linked to agricultural cooperatives, and with significant activity in towns in the interior.
This issue will be one of the protests in the marches planned for this Monday afternoon holiday, in various places in the interior, called by social networks with slogans linked to other banners (“independence of powers, the rule of law and the Republic”) and the hashtag # 12º.
The national leaders of the Mesa de Enlace have shown distance regarding this measure of protest against Heller and Credicoop.