Gov Accountability

Asociación Argentina de Contribuyentes tackles unconstitutional new tax

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Personal transportation is essential for people around the world seeking both employment and a more fulfilling life. In Argentina, 44 million people own 14 million cars and trucks and 7 million motorcycles, enough for one for almost every family. However, the Argentine government has introduced legislation that would make owning a vehicle more expensive for everyone.

On July 15, the Argentine Senate moved toward adopting a new 0.5% tax on car insurance. The tax would raise about US$50 million annually from taxpayers to fund a new forestry program. Atlas Network partner Asociación Argentina de Contribuyentes (AAC)—the Argentinian Taxpayers Association—leapt into action to prevent this destructive policy from harming everyday citizens.

AAC based their campaign on three basic facts. First, the proposed legislation violates Article 52 of the Argentine Constitution which requires that tax laws originate in the House of Deputies, not the Senate. Article 81 also forbids the Senate from breaking a tie on the tax bill should there be two versions of the legislation, meaning that this bill essentially breaks the legislative process as laid out in the constitution. In addition—and perhaps most pertinently for the average Argentinian—this tax will raise the costs of auto insurance for everyone, especially affecting workers, small business, and victims of car accidents.

The AAC’s work convinced 118 out of 257 national deputies, including the Juntos por el Cambio (former president Macri’s party) and Consenso Federal (former Minister of Economy Roberto Lavagna’s party) to oppose the legislation. Those legislators sent a letter to the president of the House of Deputies pointing out the unconstitutional nature of the bill.

“We are confident that the bill will be pulled before it progresses further in the legislative process. In Argentina there is no place for new taxes,” says Jonas Torrico, executive director of AAC. “Currently we have more than 170 taxes with an annual inflation above 50%, and we are the country with the highest tax burden after the African islands of Comoros, according to the World Bank.” It is with this backdrop that the AAC team worked to stop the auto insurance tax.

This is a victory for both the rule of law in Argentina and for the AAC, which continues to reaffirm itself as an organization with significant influence on the Argentine Congress.

Atlas Network has supported Asociación Argentina de Contribuyentes with several grants.