Macri relaunches reelection campaign with new tax cuts

Argentine President Mauricio Macri made his second campaign proposal on Tuesday in the Industrial Union of Córdoba, one of the largest states in the country, where he promised to lower the income tax for SMEs from 35 to 22 percent if re-elected.

"For the first time in our country's history, small businesses will pay less income tax than [big corporations]. The next stage is a stage of growth, more relief, and more jobs," said the president.

As LPO explained, the Argentine government will promise a new economic policy each day in an effort to improve the president's polling numbers. In the primaries, Macri lost by 17 points to Peronist candidate Alberto Fernandez. This is a surprising strategy that is more akin to the campaign of an opposition candidate, in clear contrast with the austerity doctrine that characterized the Macri administration. Government sources justify this unusual plan arguing that the financial commitments are already set for this year, although they also promised a primary surplus of 1 percent of the GDP by 2020.

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In addition to the decline in profits, Macri said that SMEs that have debts with the revenue service will be able to offset those debts that the collecting agency itself has with them. "This is justice and simplification, it is something they have been demanding for years," he said.

He anticipated that single-business taxpayers who exceed the turnover ceiling will be able to continue paying the same "which is half of what they have to pay under the current system".

"For several growing SMEs this jump from single tax to the general AFIP regime became impossible. We are also going to make their lives easier with fewer procedures and unified payments," he said.

Finally, Macri announced that companies that invest more than 10 million dollars will have incentives with fiscal and legal stability -without giving further details- "and the possibility of reducing taxes on their investments.

"We do it because we want to recognize the companies that trust [the country] and want to grow here creating jobs for Argentines. These proposals are in addition to the actions we have taken in these past four years. We need SMEs to grow and become global competitors," he added.

The Sunday election victory of the ruling coalition in the gubernatorial elections in the state of Mendoza, and the massive rallies Macri is carrying out under the slogan "Yes, you can", have convinced the government that there is still a chance winning the October election.