Argentine Supreme Court orders Macri to reimburse provinces for $570 million in lost revenue

[sandensea]

Argentina's Supreme Court rebuked President Mauricio Macri today in a ruling ordering his administration to reimburse the nation's 23 provinces and the City of Buenos Aires for lost revenues stemming from a campaign-season tax cut decree.

The court found that the August 15 decree unconstitutionally deprived provinces of 34.4 billion pesos ($570 million) of federal revenue sharing proceeds without congressional approval.

The decree, issued four days after Macri's 16-point loss in the first electoral round against center-left challenger Alberto Fernández, raised income tax exemptions by 20% for the remainder of the year and eliminated value-added taxes on around 20 basic food items.

Estimated to cost nearly $1 billion, these tax cuts sunset on December 31 - just three weeks after Macri is likely to leave office.

The ruling also represents a setback to Macri's policy of reaching a balanced budget as part of a commitment to the IMF in exchange for a record, $57 billion bailout.

But despite deep cuts in subsidies - leading to utility hikes of 3000% since 2016 - ballooning interest payments have kept the federal budget in the red by $8.6 billion in the first eight months of this year, or 2.9% of prorated GDP.

While the court-ordered restitution represents just over 1% of combined provincial outlays, governors argued the shortfall would have been a blow to local finances amid the worst recession in two decades.

The April 2018 collapse of a debt bubble known locally as the "financial bicycle" has led to a 6.9% decrease in GDP, a two-thirds loss in the value of the peso, and a consequent rise in inflation to 55% - the world's third-highest.

At: https://www.baenegocios.com/economia-finanzas/La-compensacion-a-provincias-por-baja-de-IVA-y-Ganancias-superara-los-30.000-millones-20191001-0065.html

Taking a second look, Argentina's Supreme Court has been more assertive over the past year in checking Macri's frequent "necessity and urgency" decrees - many of which have nullified even congressional legislation.

The court today sided with 15 provincial governors in striking down a number of campaign season tax cut decrees, which would have further strained local finances amid the worst recession in two decades.

[Judi Lynn]

1. Does Macri even have the ability to comply with this order by now?

He has worked so feverishly to swindle the country out of all assets it seems confusing that anything could even be left, by now, to satisfy the conditions reimbursement.

He has cleaned the country out, so fast, with the support of his allies in government.

The timeline leaves so little to the imagination.

Argentina can't afford Macri another moment. He has sinned against everyone there outside his partners in crime.

Thanks for the incredible info., sandensea.