Argentina’s highest court unanimously determined that the intervention of the Nation on the co-participation funds to the City of Buenos Aires in 2020 was unconstitutional. A precautionary measure was issued for the delivery of part of the resources claimed by the Federal Capital.
The Supreme Court of Justice ruled in favor of the City of Buenos Aires, giving rise to the amparo appeal filed in 2020 after the assault on co-participation funds by the Government of Alberto Fernández.
At that time, the President had decided to arbitrarily alter the proportion of resources that should be transferred to the Federal Capital according to the Federal Co-participation Law, in favor of the Province of Buenos Aires, to help his ally Axel Kicillof to give a increase in salaries to the Buenos Aires Police.
Many of these resources were used for electoral purposes during 2021, and Kirchnerism used the billions of pesos that corresponded to the City of Buenos Aires to patronize the Province.
The Court finally recognized that Fernández’s provisions were openly unconstitutional, and ordered a precautionary measure for the Nation to deliver a mass equivalent to 2.95% of the co-participating funds.
The transfer must be made immediately through Banco de la Nación Argentina and cannot be appealed. Therefore, Law 27,606, which provided for the reduction of the proportion of funds destined to the City of Buenos Aires, is without effect.
The Head of the City of Buenos Aires Government, Horacio Rodriguez Larreta received the ruling of the Supreme Court with optimism, and there is speculation about an eventual repeal of the Tax on Credit Cards, which the head of the PRO Government created in 2020 to compensate for the drop in co-participating income without lowering spending public.
However, it is speculated that this tax will not be repealed but proportionally reduced, since the claim of the Federal Capital and Larreta requested compensation for 3.5% of the co-participating funds, and not 2.95% as ordered by the Supreme Court. This difference will continue to be disputed between the parties and it will be up to the Justifica to determine if it will take place or not.
Despite Larreta’s resistance to repealing the tax, the Republicanos Unidos bench within the space of Juntos por el Cambio in the Capital has already announced that it will press for the approval of the total elimination of the tax.
For the moment, the rest of the ruling party (the PRO, the UCR, the Coalición Cívica and the Socialist Party) have not confirmed whether they will support the measure, or allow the repeal to be dealt with in the Buenos Aires Legislature.
The Head of the Government of Buenos Aires announced that his team will take the “corresponding measures” in accordance with the Court’s ruling, but the destination of the new tax was not specified.
It should be remembered that the Government of the PRO had committed to its rapid repeal in case of recovering the co-participating funds, but now everything indicates that it will lower it proportionally by decree without dealing with it in the Legislative Branch.
The ruling of the Supreme Court of Justice is great news for all Argentines. It is a victory for the Constitution and federalism over outrages, abuse of power and the crack. I have hope, another Argentina is possible.
— Horacio Rodríguez Larreta (@horaciorlarreta) December 21, 2022
With information from La Derecha Diario