The debate over the cost of utility bills has become a political ping pong game. The debate, initially about whether the government should implement the hikes or not, has now transitioned to the question about who should cut external taxes from the bills to reduce their costs.
First, Macri called governors – and Buenos Aires City Mayor Horacio Rodríguez Larreta, considering the city is a jurisdiction like the provinces – and district mayors yesterday to cut provincial and municipal taxes on utilities.
Then, high-profile governors such as Miguel Lifschitz from Santa Fe and Juan Manuel Urtubey from Salta came out to reject that possibility, arguing their administrations don’t charge taxes on utility bills and therefore can’t comply with the President’s request – or have already done so, depending on how you look at it. They also highlighted that the only tax included is a federal one, the Added Value Tax (IVA), and called the national government to cut it.
And now, Infobae reported the government intends to introduce a bill aimed at having provinces and municipalities cut the taxes on their utility bills. “The bills of essential public services must exclusively include the charges for the users’ consumption and the IVA and/or the gross income tax (Ingresos Brutos), should it correspond,” reads a paragraph of the initiative published by the news site.
The government would implement this decision by imposing it to the regulating and distributing entities tasked with issuing the bills in the different jurisdictions. Those who don’t abide by the norms, the bill reportedly says, will be sanctioned with an economic fine of between 10 and 10,000 times the wrongfully charged amount, and even the removal of their license to provide the service.
It remains to be seen how the government justifies the initiative from a legal standpoint, as the National Constitution grants the country’s 24 jurisdictions autonomy to charge their own taxes.
It is still unclear when the government plans to introduce the bill, but representatives of the Cambiemos coalition and the opposition will likely have the chance of discussing their proposed courses of action tomorrow, as the opposition has called for a special session in the Lower House aimed at rolling back prices of utilities to January 2018 values, before the last wave of hikes.