The Government wants to charge a tax to the banks or to the game to comply with the Court and pay the City

The Government will react this week after learning of the Supreme Court ruling, which obliges the city of Buenos Aires to partially restore the percentage of co-participation that had been removed in September 2020. After the harsh initial reaction, now the President Alberto Fernandez prepares a bill, together with the Minister of Economy, Sergio Massa. The objective is for Congress to define where the resources will be obtained to comply with the sentence and pay the Buenos Aires government.

The text will be sent in the course of this week to be dealt with urgently. As Infobae was able to find out, the proposal is that the additional $110,000 million that the Treasury needs to comply with the ruling throughout 2023 comes from a new gambling tax or else maintain the tax on the Leliq that the City had been charging.

As the Buenos Aires head of government had announced, upon recovering the co-participation resources, he would immediately move forward with a tax reduction. On the one hand, the 1.2% of stamps that began to be charged on credit cards issued in the city of Buenos Aires. And on the other hand, reduce the Gross Income tax that banks are charged for the interest of the Leliq, returning it from 8% (the level to which they had increased in September 2020) to 2.85 percent.

In the case of the tax on the financial sector, it would be a matter of “simply” maintaining this rate of 8% and not lowering it right in the election year. In this way, what the City stops collecting would go to national income. The option is to directly tax gambling income or for the effort to be shared by both sectors. In any case, the decision is for Congress to be responsible for defining where the resources will come from.

The Government now says that it wants to comply with the Supreme Court ruling on co-participation, but does not have the resources to send him to the City of Buenos Aires. For this reason, he will send a bill for Congress to approve new taxes, either to banks or to gambling.

From Economy they explain that the other option would be to take resources from the province of Buenos Aires. But it is an option that is out of the question, taking into account that 2023 is an electoral year and the suburbs are the main bastion of Kirchnerism. In addition, Governor Axel Kicillof is risking everything for his re-election and has a good chance of achieving it, despite the crisis and the high levels of poverty suffered by half of the families living in the province of Buenos Aires.

The ruling of the Court, on the other hand, explicitly indicates that the resources in favor of the City must come from the Treasury itself, without affecting the rest of the provinces in the co-participating mass.

At the same time, from the Casa Rosada they will advance simultaneously with a judicial offensive to gain time and not fall into contempt, while Congress defines the financing scheme for the Rodríguez Larreta government.

The ruling of the Court implies an expenditure of $110,000 million in favor of the city of Buenos Aires, which is not provided for in the Budget. It has already been ruled out that the resources are provided by the province of Buenos Aires, much less in the case of the Kirchnerist stronghold and in the midst of the electoral process

An appeal would be filed to put suspensive effect on the Court’s ruling, which is precautionary and was not issued on the merits. But at the same time, a principal account will be opened at Banco Nación, pending the final ruling. This would make clear the willingness to pay, avoiding contempt before a Supreme Court ruling. “We do not want to be in contempt, we want a law that tells us where we get the money to comply with the ruling.”

In the midst of the controversy with the Court, the dollar gained temperature at the end of the week. To some extent it was surprising that it climbed to 15 pesos in just days, going from $325 to $340, just at a time of greater demand for pesos by the public and companies.

However, one of the explanations for this adjustment would be related to the exchange of information between Argentina and the United States. Many investors, especially small and medium-sized ones, opted to close black accounts abroad and bring the currencies to the country, through “wire” operations. But the next step is to go out and buy tickets and keep them in safe deposit boxes, to keep them in the black.

The rise of 15 pesos in the free dollar was surprising, just at the moment of greatest demand for pesos. But this time there were many investors who entered foreign currency via “cable” and then bought banknotes in caves to stay in the informal market. Between BCRA and ANSES they prevented the increase from being transferred to the rest of the financial dollars via intervention in the bond market

This unusual demand for dollars impacted the caves, at a time of low supply, which automatically impacted prices. The Central tried together with the Anses that this rise did not impact the remaining financial dollars, through intervention in the bond market. It is possible that this greater buying pressure for dollars will continue in the coming days due to the search for refuge before the start of 2023, which is when the exchange of financial information with the United States begins.

This week will also bring news in that direction, since the Ministry of Economy will advance with the money laundering bill, as Sergio Massa had advanced. There will be incentives for those who decide to externalize assets voluntarily and the sooner they do so, the lower the rate will be.

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