The Municipal Affairs Committee of the Chamber of Deputies today received mayors from across the country who formally backed a proposal to include in the upcoming tax reform a reduction of VAT from 21% to 10.5% for all purchases and contracts made by municipalities. The initiative aims to alleviate local operational costs and create a 'cascading effect' that would allow them to lower municipal rates and improve service provision in each territory. The meeting, held in Room 1 of the A Annex of Deputies, was organized by the committee's president, national deputy from the Federal Encounter Juan Brügge, and was attended by mayors from different provinces and political representations. Mayors from the Argentine Federation of Municipalities (FAM), led by its president and mayor of La Matanza, Fernando Espinoza, were present, along with members of the Federal Council of Mayors (COFEIN), including the mayor of San Miguel de Tucumán, Rossana Chahla, and the vice-mayor of Córdoba Capital, Javier Pretto, among many other local representatives. At the end of the day, according to the Argentine News Agency, the mayors signed a joint document formally addressed to the national deputies, requesting that the VAT reduction be explicitly incorporated into the tax reform project that the Executive Branch will send to Congress in the coming weeks. It details that while the private sector can deduct VAT as a tax credit, municipalities have no way of recovering that tax, which automatically increases the cost of every tender, purchase of supplies, or contracting of services. Brügge warned that 'the situation has become unsustainable' for hundreds of local administrations that today must meet growing demands in social matters, public works, health, security, and basic services 'with fewer national transfers and increasingly tight budgets'. 'The municipality pays VAT on everything it buys, but it cannot deduct it from anything'.
