With a strong fiscal deficit as the starting point for the current National Government, and with the unavoidable decision to begin a path of austerity – and reduction – of public spending, which adds to leaving behind the monetary issue and putting an end to the scourge of inflation, the headline phrase
“there is no money”
has caused certain
“tax vices
” to deepen in some
provinces and municipalities.
The “no money” decreed by President Javier Milei implied the
cessation of discretionary transfers of funds from the Nation to the provinces
to cover their fiscal deficits, a situation that put them in financial jeopardy due to their lack of initiative to reduce their public spending.
This also has a no minor precedent, which is the quasi-elimination of the Income Tax on employees and retirees, by the previous government, which implied a
fiscal hole of $ 1 billion a year
, to the serious detriment of provincial income because it was treated of a co-participating tax.
What does Mrs. Rosa do when there is no money?
She reduces expenses.
The vicious practice of many provincial and municipal tax administrations, directed by their governor or mayor, is contrary to all logic – and to the crisis we are suffering – and consists of
increasing taxes
,
increasing the fiscal pressure
on tax-saturated taxpayers, who also their everyday costs (of life, business, etc.) have increased.
That's why we say
they go out to "hunt in the zoo."
As far as municipalities are concerned, the vices consist mainly of
raising the rates
they charge or creating new ones.
Municipal taxes should reward a public service provided by the commune to each subject, which is not the case.
Therefore, in truth,
municipalities create taxes disguised as rates,
which is a flagrant transgression of the limits imposed by the municipal tax regime.
Some
emblematic cases
correspond to municipalities of the Province of Buenos Aires.
Azul
has a rate for essential services, it covers each hectare of land with the equivalent of a fraction or a liter of diesel (depending on whether it is agricultural, breeding or mixed land).
He intends to charge between 0.5 and 1 liter, depending on the destination of the field.
According to some estimates, the municipality would collect almost 490,000 total liters per month.
What is the specific service provided?
There are already lawsuits about it.
Bolívar and Daireaux
register
increases in the road rate between 400% and 500%.
Now the value of the tax will be determined by an index made up not only of the price of meat, but also of diesel.
In
Pehuajó
the possibility of creating a tax for the use of agrochemicals went viral, but then the commune backed down.
In the provinces, voracity is the order of the day, in some cases becoming perversity.
The
Province of Buenos Aires
is very mediatized these days due to the
huge tax
that affects properties of all types (urban and rural).
According to the Tax Law for fiscal year 2024, the increases range between 140 and 200%.
However,
in certain cases there is no limit to the increase
, which is why some rural producers have stated that the new real estate tax represents an increase of more than 400% compared to last year.
Buenos Aires has also given something to talk about for the tax on gross income.
The Tax Law authorized the Collection Agency (ARBA) to collect an “additional advance” equivalent to four times the tax determined last October.
The regulations established “large companies”
as taxpayers of said advance
(as if that were an incentive), giving
few days for the entry of astronomical amounts
and without the possibility of requesting a reduction thereof due to a change in the business situation.
The province was pursuing a collection of close to $16,000 million pesos.
This advance, more than a payment on account, turns out to be a
“forced loan”,
a loan from taxpayers to the government that does not pay interest
, that is devalued in the face of inflation and that forces those affected to face the financial costs of the lack of availability of your business capital.
Some companies will take more than two years to absorb the balance in favor of this perversity.
The “additional advance” once again puts on the table the voracity of “collecting” – in reality it is
indebting the State
without the required legal procedures – by generating favorable balances.
But there is a detail: the “extraordinary” or “additional” advances bring to light a perverse attitude on the part of the rulers and tax administrators.
With this mechanism,
the defense possibilities of the
affected taxpayers are weakened because, although they imply manifest unconstitutionality, they make the judicialization of the case more difficult and
generate collection in a much faster and simpler way than with a law
that must be approved. by the legislature.
Here only a general resolution from the Tax Administration (AFIP, ARBA, etc.) is needed.
Favorable balances, in this inflationary context, imply serious harm to taxpayers and companies: capital exposed to inflation “melts” like ice cream in the sun in summer.
Thus, the roles are reversed:
the Treasury owes the taxpayer
, the taxpayer is a creditor of the Treasury.
The natural situation is the opposite.
Although a taxpayer can request a refund – that is what the law says – the taxpayer's position is always the weakest.
The Treasury has a whole apparatus to collect: in the event of non-payment, it collects through judicial means, with compensatory and punitive interest, and it can take just 60 days to obtain the funds.
The taxpayer can request a refund, with an inspection involved,
the interest rate that the State pays is approximately half of what it charges when the taxpayer falls behind
, and it has no desire to delay three, four, five years.
There are no penalties for officials' delay in returning taxpayers their money.
There is no doubt, we are facing manifest fiscal perversity, the treatment that taxpayers receive is truly immoral.
On the one hand, the Administration requires taxpayers to comply with the law, but at the same time the Administration tramples the constitutional rights of those who are obliged to pay taxes and evades the legal obligations that apply to it, violating basic constitutional principles of taxation. .
Many provinces and municipalities could be labeled with black octagons that warn of “Excess taxes.”
Taxes always increase, but they are never enough.
For what purpose are taxes collected?
For citizens or for politics?
To buy votes by giving away bicycles, as some municipalities have done?
Or to give away intimate gels, or trips for graduates, as the province of Buenos Aires did?
There is talk these days of a kind of
“tax rebellion”
in the province of Buenos Aires.
Stopping paying taxes is a very personal choice, but in some cases you cannot choose, because there is no way to pay.
Yes, it is important to keep in mind that each Tax Administration has broad powers to demand the payment of taxes, the amount to be paid for late payment interest becomes significantly more expensive, in addition to the consequences on the financial management of any company that an embargo can bring.
But it is one thing to rebel, quite another to exercise the rights that each taxpayer has, even being able
to sue the State
in the event of a tax claim that appears unconstitutional.
At this point it is vitally important that as citizens we demand from our rulers effectiveness, efficiency and – above all –
transparency
in the management of the State's financial resources.
Taxes are not there to finance the waste of politics, but to cover the needs of citizens for public goods and services, goods and services that must be of quality.
“Never again” to the waste of politics with our taxes!
César R. Litvin is partner and CEO and Martín R. Caranta is a partner of the Lisicki Litvin y Asoc studio.
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