With the objective of providing a temporary solution to small and medium-sized companies, non-profit entities and small taxpayers, the ruling party in the National Congress presented a project with which it proposes modify the Tax Relief Law.
The proposal was presented by the senator of the Frente de Todos, Daniel Bensusán, who has faith that -despite the almost null activity registered by the upper house- his project can come to fruition and be approved.
“The idea is to be able to provide a transitory response to those who face difficulties in meeting their obligations and thus avoid the expiration of payment plans,” argued the senator when presenting his bill.
The initiative consists of five articles and specifically proposes amend subparagraph 4 of article 6 of Law 27,653 on Tax Relief, arguing that the interest rates that MiPymes and small taxpayers must face have tripled.
According to Senator Bensusán, the objective of his proposal is “to alleviate the situation faced by some non-profit entities, MiPYMES and small taxpayers, who have been paying moratoriums and as of April 30 they saw interest rates raised by up to three times, or more that they had been paying,” he denounced.
Tax Relief Law: what changes are proposed
In its article 1, the official text proposes to modify the interest rates; and describes that for MiPymes, non-profit entities and small taxpayers, the interest rate will be fixed “up to one and a half percent (1.5%) per month, during the first thirty-six (36) installments resulting after applying the BADLAR rate -the BADLAR rate is calculated by the BCRA based on the interest rate for fixed terms of more than one million pesos- in national currency from private banks”.
Senator Bensusán seeks to facilitate payment plans for moratoriums for SMEs and other entities.
In turn, it proposes for medium-sized companies a fixed interest rate of up to two percent (2%) per month, during the first eighteen (18) installments resulting after application of the BADLAR rate in national currency of private banks.
In addition, for the other taxpayers, it raises a fixed interest rate of up to three percent (3%) per month, during the first eighteen (18) installments resulting after application of the BADLAR rate in national currency of private banks.
“The taxpayer or the taxpayer may choose to cancel the payment plan in advance in the manner and under the conditions established by the Federal Administration of Public Revenues,” adds the text in its article 1.
Currently, the regulation allowed adhering to payment plans with a maximum of 120 installments at a fixed interest rate of up to 1.5% per month (18% per year) during the period between April 2022 and March 2023.
After this period -April 2022 to March 2023- the BADLAR rate in national currency of private banks must be applied, which, in November 2021, when the Law was published, amounted to 34.12% per year (2, 83% monthly). However, in April 2023, the BADLAR rate was in the order of 75% per year, and despite the fact that this rate is below inflation (104.3% year-on-year), the update established in the amount of installments to be paid triples its value.
“In the face of a difficult national context -to which is added a challenging uncertainty at the international level, with projections that highlight the slowdown in world growth for this year-, it is essential that public policies continue to provide support to the productive and social fabric of our country”, considered the senator from La Pampa.
SMEs received increases of up to 300% in interest rates for moratoriums.
BADLAR rate: how it will be applied in payment plans and installments
On the other hand, the bill establishes that the application of the BADLAR rate, “in no case may it triple the amount of the immediate installment prior to the date on which it begins to be applied, in accordance with the payment plan for moratorium adhered to by every taxpayer.”
“The modification of the interest rate will be applied retroactively to the installments already due, even when they have been fulfilled and canceled,” describes the text of Senator Bensusán, adding that in these cases, the tax agency must recalculate the rates and any surplus paid must be applied to the payment of capital owed.
In other words, What the ruling party proposes in its bill is an increase in the number of installments to be paid with a fixed interestestablishing a maximum limit at the moment of using the BADLAR rate.
“It is necessary to make a modification to Law No. 27,653 to establish a reduction in the financing rate. In this way, it would allow taxpayers to comply with their obligations and avoid the expiration of payment plans, which could generate serious consequences, such as the emergence of interest and waived sanctions, as well as criminal tax and customs actions that have an impact on the normal development of their economic activity,” the national legislator stated when defending his proposal.
The pro-government senator considers that his initiative not only provides transitory responses to a sector that needs it, but also defends that the National Congress should design, approve and implement public policies that meet the needs of different sectors in order to to continue boosting the economy.
“It is essential that both the ruling party and the opposition we generate the necessary agreements for the implementation of this bill. Thus, an effective solution could be provided to our companies and taxpayers in order to enable them to circumvent the installments of the payment plans, avoiding major inconveniences that may affect the level of activity,” he stated.
