San Nicolás mayor proposes tax swap to offset municipal costs

Santiago Passaglia, the mayor of San Nicolás, has proposed the “IVA 0 – TASA 0” initiative to the Minister of Economy, Luis Caputo. The proposal suggests eliminating the local Safety and Hygiene Tax (TISH) for businesses and industries, provided the national government ceases charging VAT (IVA) to municipalities on purchases related to public works and services.

Passaglia noted that when a municipality purchases materials for public works, the VAT adds a significant cost that is ultimately incorporated into the project. The proposal suggests using electronic tax certificates to offset these costs. This comes in response to President Javier Milei’s calls for municipalities to reduce local taxes.

In a broader context, industrial sectors in the Province of Buenos Aires are reporting significant challenges. The Unión Industrial de la Provincia de Buenos Aires (UIPBA) has highlighted a correlation between high tax pressure and declining industrial employment. Data indicates that districts with the highest Safety and Hygiene Taxes have seen industrial job losses of approximately 9.4%, as businesses struggle with national taxes, provincial gross income taxes, and local rates.