in

Before debating the wealth tax, Deputies approved the Budget for 2021

The session begins at 12 o'clock to approve the 2021 budget and the new wealth tax would be voted tomorrow at 8 o'clock in the morning The session begins at 12 o’clock to approve the 2021 budget and the new wealth tax would be voted tomorrow at 8 o’clock in the morning

The Chamber of Deputies finished approving the 2021 budget project this Tuesday afternoon in an express process, after the setback that the regulation suffered in the National Senate, where there was a lack of 18 worksheets.

The vote resulted in 139 votes in favor, 20 against, 83 abstentions and 2 deputies absent; the ruling party voted in favor, Together for Change abstained, while the Civic Coalition and the Left Front voted negatively.

The bill sent by the Minister of Economy Martin Guzman It contemplates a global expenditure of eight trillion pesos, a GDP growth of 5.5%, an inflation of 29% and a deficit equivalent to 4.5% of GDP. In addition, the price of the official dollar, as of December of next year, will be 102 pesos.

The project also estimates that exports will grow by 10.2% and that there will be an increase in imports of 20.4%, with a surplus trade balance of around USD 15,087 million.

With regard to social expenses, the Budget establishes that $ 5.5 billion will be allocated to social expenses for the payment of pensions and social allowances. This number is before the adjustment formula that would be dealt with in extraordinary sessions was known. The amount also includes food and social economy programs, among others.

Previously, the possibility of including a project by the radical deputy was debated Emiliano Yacobitti to be able to deduct education expenses from income taxes; the vote resulted with 115 votes in favor and 124 against.

Also, the deputy Dolores Martinez asked the Minister of Health to attend the venue, Ginés González García, to explain the government’s policy in the face of the pandemic, but the initiative was denied by the majority.

From the Ministry of Economy, they celebrated the resolution and pointed out that the regulation has “two fundamental principles: Macroeconomic stabilization: Promote economic recovery with an expansive fiscal policy scheme and a State that plays a fundamental role in protecting the most vulnerable sectors, incentivize the domestic market and promote growth in production and exports. Essential axes for our country to sustain growth. The second is “Fiscal sustainability: it will require a consistent effort to achieve a fiscal balance compatible with inclusive growth.”

The Minister of Economy of Argentina, Martín Guzmán.  EFE / Juan Mabromata / Archive The Minister of Economy of Argentina, Martín Guzmán. . / Juan Mabromata / Archive

As explained by the Ministry of Economy, the main “strategic priorities” of the Budget are reflected in 6 pillars of public investment in 2021:

1 • Productive and social infrastructure: Infrastructure will once again be a motor of the economy, job creation and competitiveness of Argentine companies with an inclusive and federal criterion. In 2021, real investment in productive and social infrastructure will double compared to 2019, based on a projected investment of $ 835,000 million or 2.2% of GDP.

2 • Innovation and Development: Real investment in innovation and development will increase by 160% compared to 2019, based on a projected investment of $ 187,000 million or 0.5% of GDP that will allow sustaining the extraordinary real spending level of 2020.

3 • Public Health: There will be a 49% increase in real investment in Public Health compared to 2019, based on a projected investment of $ 199,000 million or 0.5% of GDP.

4 • Education and Connectivity: the real investment in Education and Connectivity will increase by 11% compared to 2019, based on a projected investment of $ 483,000 million or 1.3% of GDP.

5 • Active social inclusion: Real investment in Active Social Inclusion will increase by 49.5% compared to 2019, based on a projected investment of $ 270,000 million or 0.7% of GDP.

6 • Gender and diversity: In 2021, the real investment in Gender and Diversity will rise by almost 1,350% compared to 2019, based on a projected investment of $ 6,205 million. It allocates $ 1.3 trillion to policies that close inequality gaps. This is transversal to all the Ministries, there are 55 gender policies from 22 agencies that operate in 14 Ministries.

Wealth tax

After several months sleeping the sleep of the righteous, Congress began to debate the Extraordinary Solidarity Contribution bill after the budget, called the new wealth tax.

The debate promises to be extensive but seems to have an early end. According to parliamentary sources, both the ruling party and the opposition presented a list of around 80 legislators each, which would mean that the discussion and presentations would extend the debate until the early hours of tomorrow. It is estimated that it would be approved around 8 in the morning.

What seems more certain than the voting hours are the raised hands that the ruling party will have. The bill needs to be approved by a simple majority, that is, 129 deputies who vote in favor. And the Front of All has them.

The ruling bench has 119 deputies and this group will be joined by the 11 from the Federal Interblock that commands Eduardo Bucca; the 6 of the Unit for Development interblock, which presides José Luis Ramon; the monobloc of the Neuquén Popular Movement and now two more from the new Federal Action bloc that commands Felipe Alvarez, who until the previous session was part of Together for Change.

President Alberto Fernandez, in a meeting with the president of the block of the Frente de Todos en Diputados, Máximo Kirchner;  the president of the Budget Committee, Carlos Heller;  and the Minister of Economy, Martín Guzmán.  During the meeting, they analyzed the draft tax on large fortunes. President Alberto Fernandez, in a meeting with the president of the block of the Frente de Todos en Diputados, Máximo Kirchner; the president of the Budget Committee, Carlos Heller; and the Minister of Economy, Martín Guzmán. During the meeting, they analyzed the draft tax on large fortunes.

With these numbers the debate seems to be more for each one to feel a position than for the possibility of a discussion. Although there is the possibility of changes to the project, especially the possibility of raising the floor of the non-taxable minimum from 200 to 300 million pesos.

Once approved, the bill will go to the Senate where the ruling party also has the necessary votes to approve it, But deadlines are the main point to pay attention to. The project will enter the Budget Committee and, once it obtains an opinion, it will go to the site.

The draft of the tax, drawn up by the deputy Carlos Heller At the request of Maximum Kirchner, establishes the payment of a progressive rate for Argentine individuals or “human” persons starting at $ 200 million. It does not matter that the person has tax residence in another country, but it does not reach foreigners. It starts with an aliquot of 2% and reaches 3.5% for assets of more than $ 3,000 million in the country. The rate rises to a maximum of 5.25% for those who have assets abroad. If they decide to repatriate 30% of their financial holdings, they will be exempted from that differential and will be matched with the rest of the contributors in the country. Most tax specialists and entities that represent businessmen described it as confiscatory and contrary to the strategy of attracting investment that the government needs.

Minister Guzmán will have his budget today Minister Guzmán will have his budget today

I kept reading:

Due to the devaluation, the number of people obliged to pay the wealth tax would be double what was originally planned

Although he does not share the project, Martín Guzmán takes it for granted that the wealth tax will be approved