January 29, 2021
1. President Fernández resumes foreign policy agenda
President Alberto Fernández completed an official visit to Chile, where he was received by his Chilean counterpart, Sebastián Piñera. From the Palacio de la Moneda, the seat of the Chilean executive branch, Piñera stated that the visit “reflects the will and commitment of both governments to continue strengthening friendly and collaborative relationships,” while Fernández restated the importance of the ABC (Argentina, Brazil and Chile) connection, stating that “if we had [worked together], we would have done a better job managing the pandemic.” The next day, the Argentine president met with Chilean business leaders and stated that exchange controls would be lifted as soon as the economy recovers. On a similar note, during his time at the virtual “Davos Dialogue” on Thursday, Fernández criticized the “toxic indebtedness,” highlighting that talks with the IMF are continuing as well as stating that there is “no place for irresponsible adjustments that are impossible to comply with”.
2. The government regulated the Wealth Tax
Through Decree 42/21, the President regulated the Wealth Tax, which dictates a one-time payment between 2% and 3.5% of the assets of individuals over AR$ 200 million. Likewise, the Federal Administration of Public Revenues (AFIP) was enabled to notify the more than 11.000 taxpayers who have a fortune above the minimum established and who are required to pay. In this sense, the regulation stipulates that the subjects reached may record the difference between the assets and the liabilities of the company corresponding to December 18, 2020. On the other hand, the decree determines that the rate to be paid will increase according to the range of fortune that has been declared: it will be 2.25% for those between AR$ 300 and AR$ 400 million, 2.50% for those with between AR$ 400 and AR$ 600 million, and 2.75%, for those assets between AR$ 600 and AR$ 800 million. In addition, the contribution will rise to 3% in the case of fortunes between AR$ 800 and AR$ 1,500 million and will be extended to 3.25% for those with between AR$ 1,500 and AR$ 3,000 million. Those who have assets that exceed this last value will be charged 3.5%.
Ámbito Financiero: La AFIP ya está habilitada para cobrar desde hoy aporte extraordinario
3. Government advances on implementation of “Gondola Law”
Via Resolution 110/21 published in the Official Gazette, the Secretariat of Interior Commerce made strides on the regulation of the “Gondola Law”, establishing a minimum price, the products and the categories of products that businesses falling under the law – which establishes clear, lower prices for local products – must obey in order to comply with the law. In this sense, government officials clarified that the time to implement the law in the stores will be 90 days, to be counted from December 15 of last year. Additionally, the Undersecretariat of Actions for Consumer Defense will be tasked with enforcement of the law. In this way, the government hopes to offer a wider selection of goods at large supermarkets and the possibility of equal treatment with small/medium-sized enterprises, cooperatives and small family farms.
Ámbito Financiero: Gobierno avanza con la aplicación de la Ley de Góndolas
4. Additional topics added to extaraordinary legislative session docket
Through Decree 38/2021, the executive branch added new items to the agenda for the upcoming extraordinary congressional sessions. The decree added the postponement of a discount on income tax; a project to suspend open, simultaneous and obligatory primary elections (PASO); the nomination of central bank officials, the reactivation of public housing projects; the implementation of the Federal Procedural Penal Code, among other items to the docket. Chamber of Deputies President Sergio Massa was able to delay the protocol for mixed legislative sessions with the support of the opposition in exchange for the addition of a biofuel bill that ended up being omitted from the list. Beginning with the failed negotiation as well as an uptick in COVID-19 cases among representatives, the lower house’s sessions will resume next week.
5. Economic activity falls 3.7% in November
The Argentine statistical agency (INDEC), via its Monthly Economic Activity Estimator (EMAE), reported that the Argentine economy registered a 3.7% year/year drop in November, albeit with a 1.4% increase over October. Over the first eleven months of 2020, the economy dropped a total of 10.6%. The sectors that grew the most in year/year terms included financial intermediation (11.7%), trade (3.9%), industry (3.7%), and utilities (1%). On the other hand, the biggest falls were reported in the hotels and restaurants (-53.2%) and transportation and communication sectors (-18.2%).