Buenos Aires Herald 
Following a meeting between President Javier Milei and all of Argentina’s provincial governors on Tuesday, eight have pushed back on the suggestion to reverse an income tax reform. With federal tax shares as a key concern at the meeting, their communiqué lambasted last week’s devaluation and called for an increase of Argentina’s check tax instead.
Argentina’s Senate approved a law raising the threshold of the income tax known as Ganancias in late September, which was set to go into effect in 2024. This reduction was a key concern at the meeting between the president and governors (including Buenos Aires City Mayor Jorge Macri) because it decreased the amount of federal tax share money destined for provincial coffers. According to Télam, some suggested repealing or reinstating the tax as a result.
Federal tax shares, known in Spanish as coparticipación federal, are public funds distributed between the provinces and drawn from federal taxes, including income tax, property tax, and value-added tax. Each province receives a set percentage of the total, and there was a fierce political battle earlier this year over Buenos Aires’ stake.
“The national government does not want to reinstate Ganancias but if the provinces need it, that can be discussed,” spokespeople present at the meeting told state agency Télam. “Another possibility is to include it in the national budget so it’s debated every year: it’s not just a central government issue, it should be propelled by all the provinces.”
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However, eight governors, who call themselves the Liga de gobernadores (League of governors), have pushed back against the idea. While they highlighted the need to find financial compensation for the new government’s steep devaluation last week, “backtracking on the income tax is not the appropriate path because it affects workers’ rights.”
“An acceleration in the country’s inflation was quickly unleashed which affected purchasing power. A devaluation is not just austerity, it implies a massive transfer of income from the working class, whose salaries are in pesos, to the business sector with concentrated wealth in dollars,” said the communiqué, which was published by the governors on social media.
“This, together with the loss of [resources destined for federal tax shares], the halt in public works, the announced reduction of subsidies, and other measures directly affect provincial resources,” said the document. “They don’t defund governments, but the people that live in the Argentine provinces.”
The “League of governors” includes Axel Kicillof (Buenos Aires), Sergio Ziliotto (La Pampa), Raúl Jalil (Catamarca), Osvaldo Jaldo (Tucumán), Gildo Insfrán (Formosa), Ricardo Quintela (La Rioja), Gustavo Melella (Tierra del Fuego) and Gerardo Zamora (Santiago del Estero). Kicillof reiterated the demand that his province should receive a higher share of federal taxes given the magnitude of its contributions as he took office for a second term last week.
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—with information from Télam
