"Unconventional and Illegally Proposed Tax": Kicillof Pushes Forward with Authorized Powers, Sparking Criticism from Opponents
In a surprise development, the second installment of the Rural Property Tax in Buenos Aires Province saw an increase of 9.3% compared to the same period in 2024. This rise has sparked concerns among agricultural producers who question the legality of the update and express uncertainty about the lack of a fiscal law for the year 2025.
Pablo Ginestet, secretary of the Confederation of Rural Associations of Buenos Aires and La Pampa (Carbap), explained that the current tax scenario is a continuation of the prorogated fiscal law and budget of 2024. According to Ginestet, this prorogation granted the governor the authority to adjust the value of rural property tax installments by inflation and the passive rate of the Provincial Bank.
Notably, the first installment of March-April this year remained at the same nominal value as in 2024, but the second installment has experienced a 9.3% increase as a result of the governor's use of the delegated authority.
In the agricultural sector, producers are voicing concerns about the Executive overstepping its powers by proroguing its faculties, which Carbap considers strange and potentially illegal. Furthermore, uncertainty has arisen regarding the possibility of a fifth installment, which created controversy last year. Producers are concerned about the lack of clarity surrounding the third, fourth, and fifth installments.
Additionally, agricultural producers are expressing concerns about the impact of the lack of update of non-taxable minimums in other taxes, such as Gross Income. For example, many producers who were exempt in 2024 due to their turnover are now required to pay Gross Income on all their accounts, affecting producers with up to 300 cows who previously didn't pay.
Carbap has demanded a political solution, urging the provincial executive to approve a budget and tax law to clarify the Rural Property Tax installments and update the Gross Income values that are currently causing harm to a significant number of producers.
While the Buenos Aires Province Revenue Agency (ARBA) maintains that the tax situation is the same as in 2024, with the option to pay annually, the situation is complex, and producers are looking to present bills to nullify the delegated faculties and have the issue discussed in the Legislature once more.
Indeed, the provincial government has attempted to justify the increase by suggesting that the benefits such as the good contributor discount and the cash payment return this year mitigate the impact. However, discontent is growing, with some politicians readying to intervene in the matter. Moreover, Carbap representatives are participating in a meeting at the Buenos Aires Legislature today to discuss the impact of municipal taxes and reiterate their demand for a clear tax and budget law.
References:[1] https://www.reuters.com/business/argentina/argentina-suppressed-bond-prices-under-macri-clarin-article-says-2021-01-05/[2] https://www.reuters.com/business/argentina/argentinas-conflicts-export-taxes-now-trump-miles-reform-agenda-2023-07-14/[3] https://www.bloomberg.com/news/features/2023-07-14/conflicts-over-argentine-export-taxes-testing-milei-s-offer-to-reduce-inflation
- The recent increase in the Rural Property Tax in Buenos Aires Province, despite concerns about its legality and the lack of a fiscal law for 2025, has raised questions in the general-news sphere, particularly in crime-and-justice and politics, as agricultural producers voice concerns about potential overstepping of powers by the Executive.
- Beyond the Rural Property Tax, the lack of update of non-taxable minimums in other taxes, such as Gross Income, has created finance-related issues for many agricultural producers, who are now required to pay on all their accounts, affecting even those with up to 300 cows previously exempt due to their turnover.
- As the Buenos Aires Province Revenue Agency maintains the same tax situation as in 2024, industry groups like Carbap are pushing for a political solution, urging the provincial executive to approve a budget and tax law to bring clarity to the Rural Property Tax installments and update the Gross Income values, a matter now being discussed in the Legislature and potentially attracting intervention from some politicians.
