October 4, 2019
1. Supreme Court rules in favor of provinces over national government in taxes
The Argentine Supreme Court ruled in favor of provincial governors and established a measure preventing the government from using co-participatory funds to eliminate value-added tax (VAT) and lower income tax. This means that if the government wants to continue with this policy, it must bear the entire financial burden by itself, so as to not affect provincial revenue. In a ruling with one dissenting vote, the court sustained that financial costs should be assumed by “the national government, without affecting the co-participatory funds that belongs to provinces.” The ruling stemmed from a complaint made by the government of Entre Ríos, disputing Decree 561/19 which lowered income taxes and Decree 567/19 which eliminated VAT for various basic provisions.
2. Alberto Fernández meets with Argentina’s most powerful business leaders
Frente de Todos candidate and frontrunner for this month’s presidential elections, Alberto Fernández, held a meeting with leaders from the Unión Industrial Argentina (UIA) – one of the most important industrial employer advocacy groups in the country. Fernández was joined by campaign chief Santiago Cafiero and the leaders of his economic team, Matías Kulfas and Cecilia Todesca. Accordingly, Fernández highlighted that the meeting was “very productive” adding that UIA leaders had a very similar outlook regarding the country’s current state and a similar drive to reconstruct the industrial sector. President of the UIA, Miguel Acevedo, emphasized that Fernández asked for a close dialogue with workers. The UIA also handed the frontrunner a document titled, “Productive Proposals: a platform to generate and export value to the world,” with initiatives centering on costs, competition, production, taxation, new technology, SMEs and regional development.
3. Macri promises benefits for SMEs if reelected
In a meeting with the Industrial Union of Córdoba province, President Mauricio Macri promised to take new economic measures for small and medium enterprises in the event his reelection as Argentina’s leader, taking place later this month. Macri divided initiatives into four axes, all with a common objective: instituting financial relief for a sector that is among the largest employers in the country. First, he stated he would lower income taxes for small business from 35% to 22%, while allowing businesses to offset debts with the Argentine revenue service (AFIP) and cut taxes in half for those businesses that switch to a general business tax regime under a simplified tax regime. Similarly, productive investments within the “Industry 4.0” framework will receive a discount on income taxes. These promises were added to President Macri’s proposal so that SMEs that hire will pay no employer contribution in 2020. Lastly, in line with President Macri’s proposals, Finance Minister Hernán Lacunza assured the government has ambitious goals to curb inflation, but stated if Macri is reelected, more polices will be put in place to promote employment and exports, with the hopes of ensuring 3% annual growth.
4. Macri inaugurates largest solar farm in South America
President Mauricio Macri inaugurated the Cauchari Solar II and Cauchi Solar III solar farms in Jujuy province, at 4,020 m (13,189 ft.) above sea level. The premises cover a total area of 800 ha, 600 of which will be filled with solar panels that will generate approximately 230,000 MWh of electricity per year and save nearly 260,000 tons of CO2 per year for every 100 MW of power installed. Both parks will generate electricity that will equal the energetic consumption of 160,000 homes, thanks to 1.180.000 solar panels installed in Jujuy’s Puna, with a lifespan close to 25 years.
5. Volume of trade with Brazil drops 25.3% so far in 2019
According to data from the Brazilian secretariat of Foreign Trade, imports from other Mercosur countries fell 19% year-over-year, dragged down by the decline in Argentine imports of 24.6%, with repercussions in the export of automobiles, wheat grain, cargo vehicles, soybean derivatives, among other products. In a similar vein, imports from Brazil into Argentina have dropped 33.7% year-over-year. So far in 2019, Argentine exports have totaled USD $7.815 billion and imports USD $7.474 billion.