LatinNews Daily - 02 October 2019

* Argentina’s supreme court (CSJN) has issued a preliminary ruling that stipulates that the decision by the government led by President Mauricio Macri to temporarily reduce value-added tax (VAT) rate to 0% on a range of food products and to increase the income tax threshold must not affect the ‘co-participation funds’ distributed to provincial governments. This means that the measures cannot result in the federal government distributing a lower share of federal tax revenues owed to the provinces. The Macri government adopted these emergency economic measures in August to alleviate the effects of the domestic economic crisis. But a group of 15 provincial governments filed formal complaints before the CSJN demanding that the fiscal cost of the measures is not passed on the provinces. The ruling is a blow for the Macri administration as it means that it must now solely assume the costs of the measures.

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