28 Nov 2018
In recent weeks Ariel Guarco combined his international activities with an active presence in his own country, where the cooperative and mutual sector managed to effect the reduction of a fierce tax increase.
"The cooperative sector has given the world the hope that it is possible to jointly resolve the problems we face. Articles 23 and 24 of last year's Tax Reform, Article 85 of this draft budget, and Article 126 that amends it, do not respect our legal status; nor do they address recommendations from international organisations on the fiscal treatment of our sector", explained the International Cooperative Alliance President at the Argentine Senate.
This was his reference to the government's successive attempts to increase the amount of tax paid by cooperatives and mutuals, contrary to the legal status these companies hold.
"The state should treat cooperatives in the same way as nonprofit enterprises. We have always made contributions, and what's more, we've done it in difficult times, but our legal status must be respected. We can never accept them placing a tax on our profits" said Guarco weeks earlier in a meeting with cooperatives and officials in the centre region of the country.
Guarco was called to parliament as president of the ICA, where he underlined the support cooperatives have at a global level with the 2030 Agenda of the Sustainable Development Goals. He also gave references to fiscal treatment consistent with the nonprofit nature of these enterprises, ILO Recommendation 193, and the United Nations' International Year of Cooperatives declaration.
Even though political forces with legislative weight had scrapped the application of tax on profits, as applied to profit-making companies, they increased the special contribution on equity that cooperatives and mutuals in the finance and insurance sector generate to 6%, resulting in a "confiscatory" measure and unequal respect for a different type of enterprise operating in these market sectors.
After dealing with national leadership, parliamentarians gave their preliminary approval of a draft to reduce this contribution to 3%. Given the bicameral structure of legislative power in Argentina, it is hoped that in the coming days this will be fully approved and enshrined in law.
"The cooperatives and mutuals affected by the high original aliquot are national enterprises, distributed across the whole of the country. The application of it would represent serious harm to provincial economies", stated Guarco in a memo to the legislators, signed by Guarco in his capacity as ICA President, together with other leaders in the solidarity-based economy in Argentina.