December 11, 2013
Legislature approves new lawFriday, August 30, 2013
City tax debtors could face prison sentence
Tax debtors in Buenos Aires City could face up to six years in jail if convicted after the City Legislature approved yesterday a law empowering the Government Agency of Public Revenue (AGIP) to file accusations against them before Criminal courts in the City.
The bill was introduced by PRO lawmaker Martín Ocampo, member of the Budget, Revenues, Financial Administration and Tax Policy Committee, and was approved by 49 of the 60 City lawmakers.
“It’s a one-article law that modifies City powers and establishes how AGIP must act when discovering an irregular situation,” Ocampo told the Herald.
The new law incorporates a new subparagraph to Article 3 of the City Fiscal Code — number 27 — that enables AGIP to “denounce before the Buenos Aires City Felony and Misdemeanor Criminal Cases courts the alleged commission of offences established in Law 24.769 and its modifications, when understanding a punishable conduct was committed given the circumstances of the case and the subjective element.”
In other words, debtors could face a two-to-six year conviction if found guilty of tax evasion by “misleading declarations, concealment or any other type of scheme or fraud” that leads to “total or partially evading tax payments to national, provincial or the City’s tax bureau”.
Will every debtor be at risk of ending behind bars from now on? According to the amendment, minor debtors shouldn’t worry for now, provided their debts don’t escalate to higher amounts.
For this purpose, Ocampo’s bill sets a tolerance for 400,000 pesos per fiscal period and per tax category. Every City tax will be under scrutiny, from the ABL property tax to vehicle registration, among others.
“Buenos Aires City needs this instrument not only to regulate and eventually punish tax evaders but also as a deterrent method, particularly since the municipality had to take responsibility for financing health and education among other public services,” Ocampo told this newspaper.
The law is expected to come into force two weeks from now, around mid-September.
“The level of tax evasion is something every government tax bureau is concerned with, whether they are part of national, provincial or municipal administrations,” notes the fundamentals of the law.
Now, Buenos Aires City Mayor Mauricio Macri’s administration will have one new way to reverse this weakness.