critics of Alberto Fernández's plan

In the offices of tax advisers and in the financial management of companies, there is no other speech. A new national property tax, reinstatement of inheritance tax, extraordinary increase in personal property and tax realization of the sale of dollarsare more than enough reasons for the alarms to go off and all plans to be reviewed.

The document published Wednesday by iProfesional leaves no doubt: the budget deficit will be covered by the creation and increase of taxes. Far is the possibility of easing the fiscal accounts by a significant reduction in public spending.

Ginés González García, coordinator of the party team of the justicialist party responsible for preparing the 118-faceted document, said that "the document brings together many suggestions, but they are in no way obligatory or obligatory"However, the reality is that the recognized taxpayers consulted by this means already assume that many of the measures mentioned therein will be encouraged in case, as it is likely, Alberto Fernández would be anointed to the presidency of the next president.

The document was read carefully. And critics are coming soon. The tax experts questioned both the form and content of the tax proposal, which goes in the opposite direction to the long-sought tax reform of the private sector.

For example, the proposal for a new national property tax has been challenged from a legal point of view, as it would legitimize triple taxation of the same property, which would also mean discouragement of the construction sector, already depressed.

In summary, experts believe that the intensification of the tax burden not only hurts the country's wealth generating sector, but it is even doubtful that the latter will achieve a significant improvement in terms of collection.

"The current situation shows a high and complex tax burden. Proposals to create new taxes and increase existing taxes are the least appropriate drug for the need to improve economic activity for job creation, "said César Litvin, CEO of Lisicki, Litvin & Associates, categorically.

Meanwhile, Daniel G. Pérez, president of Estudio Pérez, Fiocco & Asociados, left a lawsuit for lapidary: "The document is a tax tax of magnitude".

Real estate, triple taxation risk

One of the proposals raised by most polvareda concerns the implementation of a national tax on real estate, articulated and coordinated with provincial real estate. And experts doubt that such a tax can be applied effectively, both for practical reasons and for possible legal impossibility.

Carlos Roca, CEO of Croca Consultores, warned these media that a national property tax "would be made inoperative by tax pacts, by the distribution of power in the National Constitution and by the violation of tax principle of double taxation ".

As a failed record, it should be kept in mind the wealth tax that the former governor of Buenos Aires, Daniel Scioli, had applied in 2007 in the province. The Supreme Court of Justice of the nation has requested its suspension, based on the principle of unconstitutionality of taxing the same manifestation of the contributory capacity as national taxes (personal property).

For his part, Sebastián Domínguez, partner of SDC Tax Advisors, emphasized the following superimposition: "This is not done only in personal property, but with another tax (national land tax), in addition to the corresponding provincial land tax . "

"That is, pay three taxes for the property of a property," Dominguez said.

"There is no margin for the creation of additional taxes.The real estate tax already provincial real estate and personal property tax. All these proposals tend to be confiscatory and further depress the punished property market ", said Diego Fraga, partner of the RCTZZ study.

National Estate Tax, Statement

The document prepared by the PJ technicians also promotes a tax on wealth enrichment for free at the national level. Today, it is in effect at the provincial level only in the province of Buenos Aires, with few positive results.

"The proposal to create it at the national level is contrary to the law of co-participation and totally incompatible with the tax on personal property, because it exposes a multiplicity of charges to the same assets," warns César Litvin.

For his part, Sebastián Domínguez emphasized that "this type of measure will have an impact particularly on the middle class, since people with large assets can adopt structures that allow them to avoid taxes or reduce their impact, because they have the advice and the money to move them forward. "

Iván Sasovsky, CEO of Sasovsky & Associates, reminded that "the inheritance tax has failed in Entre Ríos and in the province of Buenos Aires, because there are still ways to avoid it.C & # 39; is a provincial power; the creation of a national tax on inheritance would be unconstitutional ".

Increase in personal assets, purchase and sale of dollars and financial income

As he had planned a few weeks ago Professional, the programming document given to Alberto Fernández also includes another proposal to apply extraordinary taxes for two years, through:

– A special aliquot of personal property, real estate and financial assets located abroad.

– To the profits of the financial sectorapplicable on the profitability of the assets and equity of each entity.

– When buying currency sales.

And, again, critics are concerned both with the dubious legality of the proposal and with the low expectations of results from the point of view of tax collection.

"The application of extraordinary taxes on personal property, in addition to not being relevant from the point of view of collection, will exceed the confiscation boundary established by the current case law," warns Litvin.

For his part, Diego Fraga said that "unfortunately, our history is quite negative in terms of extraordinary taxes, since they have always become ordinary".

In addition, he criticized the possibility that new tax burdens could hit those who at the time had joined the "money laundering" of 2016.

"Regarding the establishment of a progressive tax on assets declared to fiscal sincerity; would constitute a serious violation of acquired rights, a new breach of the principle of legitimate expectation and, ultimately, legal certainty, "said Fraga.

"The creation of a profit tax in other years of the financial sector could also involve the retroactive effect of acquired rights, violating legal certainty and, moreover, such a tax would duplicate many other taxes supporting these entities. (national, federal and European) municipal.) Thus, it could also carry cases of confiscation, "Fraga risked.

For his part, Sebastián Domínguez considers it a mistake to pretend to collect a tax – it is understood that it would be a profit – when buying and selling coins, now exempt for human beings.

"A person saves in dollars to protect himself from inflation and economic problems, and when she sells the dollars, she has to pay profits, even on nominal incomes not adjusted for inflation," warns. # 39; expert.

"Another very negative impact would be to tax the financial income with an aliquot of up to 35% by eliminating the 15% schedular tax.Investors – human beings – pay in many cases the tax of 15% on incomes that are not real, the effect of inflation, "he added.

Far from increasing the burden of these revenues (term interest and government securities), Litvin says that "the tax on these items must be eliminated because of the poor results of collection and proven damage they have resulted."

"All of these measures end up falling into SMEs and the middle classbecause those who have a significant inheritance find a way to defend themselves in court and avoid paying these taxes, "said Ivan Sasovsky.

Check the tax, worse the cure than the illness?

Daniel G. Pérez, holder of Estudio Pérez, Fiocco & Asociados, is also focused on another controversial proposal: "It is proposed to replace the check tax with a tax on progressive financial transactions. "

"It's a tax tax. It is very risky to generate escalation in a typical transaction tax unless the idea is to tax the financial income.. The theoretical progressivity of transaction taxes is difficult to measure and apply. This is about wanting to ensure that large banking transactions pay more taxes, but through a complex and illogical mechanism, "said the expert.

"The check tax is one of the worst taxes created at the federal level and has been tried in recent years to reduce it to a minimum. It should tend to its total elimination and not to replace it with another. continues to complicate transactions and encourage informality, "said Diego Fraga.

The document inside: Tax Proposals

Professional accepted from a voluminous document that is already in the hands of the presidential candidate, Alberto Fernández. he paper of 118 facets was prepared by several technical teams and brings together the different proposals that the candidate of the Front for All could promote, if they assumed the presidency.

The document includes proposals on education, health, safety, labor and taxes, among other central areas.

Then the full text:

Tax changes

First of all, and as a campaign council, the document prepared by the justicialist party states that "the best contribution what taxes can do for our campaign is to pass unremarked Not to be mentioned, nor to become a subject. "

"After four years of change and the current economic situation, all sectors are right to question the taxation of their activities and, on the other hand, our history does not help in this regard. ", says the document.

Among the other areas of action, the document proposes the following measures:

– We will not raise taxes or redistribute the tax burden, thus reducing the current weight of the tax system on the popular and intermediate sectors, in particular SMEs, employees and the self-employed, without damaging public finances.

– "Contractualises" the tax benefits and concessions granted to large companies, by keeping them to the extent that compliance with the production, investment and employment objectives determined for growth is verified.

– Application of extraordinary taxes for two years: by means of a special rate of personal property, real estate and financial assets located abroad; financial sector profits, applicable to the profitability of the assets (ROA) and the equity (ROE) of each entity; when buying currency sales.

– substantial improvement in the fight against tax fraud through the immediate coordination of the country's tax administrations, through the creation of the federal network of tax administrations, the internalization of "ex ante" control and international coordination by the adoption of BEPS initiatives.

– Extend the refund of VAT to its maximum expression: it has no significant long-term tax cost, as long as it is limited to sectors with lower incomes or with a maximum return limit.

– Redefining the structure of internal taxes to effectively achieve and in a differentiated way to the manifestations of luxury consumption and superfluous.

– Incorporate a tax on financial transactions at differentiated rates according to economic policy objectives, which replaces the current "tax on checks".

– Improve the levy on financial income to give greater progressivity to the income tax. It must not be cedulous: it must be integrated with the rest of the calculable income.

– Redefining the adjustment to account for inflation in order to avoid the multiplication of tax losses and the decrease in recovery in the inspection of legal persons.

– Create a national tax on real estate, articulated and coordinated with the provincial real estate.

– Recreate a free wealth enrichment right (national inheritance tax).

– Redefine the tax incentive system through centrally managed tax credit obligations.

– Harmonize retention and perception systems in all the countries.

– To fulfill the mandate VI of the CNA (new federal law on co-participation) based on the principle of tax competition.

In this way, it is hoped that, at the end of Alberto Fernández's term, the following objectives will be achieved:

– Placing the total tax burden at 32% of GDP. With 25 points at the head of the national state and 7 between provinces and municipalities.

– Providing provinces and CABA, together, with nationally sourced resources for each concept (automatic and non-automatic) for at least 11% of GDP.

– Increase the presence of taxes on income and assets must not be less than 30% of the total.

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