16 provincial governors have appealed to the Supreme Court for the reversal of President Mauricio Macri’s recent decision to remove the IVA (VAT, value-added tax) from basic food items until December.
The governors argue that provincial governments had not been consulted about policy, and that it would be an automatic decrease in public funds without proper planning.
The individual appeals to the Supreme Court by each governor were issued by the provinces of Formosa, Tierra del Fuego, Río Negro, Catamarca, Chubut, La Pampa, La Rioja, Neuquén, Salta, San Luis, Santa Cruz, Santiago del Estero, Tucumán, Misiones, Santa Fe and San Juan, according to La Nacion.
Macri’s move to lower the tax comes in the wake of severe currency turbulence after the Aug. 11 primary vote.
The measure is intended to “help offset the impact of the devaluation on prices,” the government has said in a statement.
The full list of items that are now exempt from IVA includes bread, milk, sunflower oil, sugar, dried pasta, rice, wheat flour, polenta, yerba mate, preserves, yogurt and eggs.
Federico Nazur, the attorney general of Tucumán, told Perfil that Macri’s decree was “unconstitutional,” since the power to control taxes rests with Congress.
The provinces in the lawsuit estimate that the tax-cut will cost the government revenues of almost 35 billion pesos by the end of the year.
In the Senate, a group of Justice Party senators have presented a bill to “compensate the disequilibrium that brought by rigged measure of the national government about IVA and spending.”
– TIMES / PERFIL