Press and Social Media

The pillars of the law for 2017

• Wednesday February 01, 2017
• Gustavo A. A. Sena

Lifting the prohibition for buying foreign currency or “cepo”, a successful negotiation with holdouts and inflation reduction were some of the goals the Argentine current administration achieved in 2016. Economy is slightly recovering, but there are no investments yet. Other issues that are of paramount importance will gain prominence in order to strengthen confidence and boost economy in a definite way.

The tax amnesty program has not come to an end and it is already a success. It has surpassed all expectations. However, from the very beginning, just talking about a voluntary disclosure of assets or tax amnesty shows an unfair inequality for those who have not lied about or hidden their assets. The prize for those who voluntarily disclosed their assets is rather meager: they will be exempt from paying taxes over their personal assets for three years.

However, there are inequalities even between those who joined the tax amnesty. Many of them transformed declared incomes in “black money” transferring it abroad. Others simply never declared it. Nevertheless, both of them used their original incomes to purchase dollars in the parallel-foreign exchange market and transferred the resulting dollars to foreign bank accounts. Anyway, both now accepted to be submitted to the tax amnesty and accordingly, they are going to pay just 10% of the washed amount. The difference between them lies in the fact that the former invoiced his/her work and paid taxes for it, while the latter did not. Therefore, those who converted declared incomes into “black money” are in a worse position than those who have hidden the income from the beginning. Nevertheless, both groups are in a better position with respect to those who always abode by the law. These tax payers who comply with all the fiscal regulations should be rewarded, as well as punished when they have not complied with the law. Once the tax amnesty scheme comes to an end, these inequalities should be addressed either by the Government or judges, in an attempt to achieve equity between what seems to be an unfair inequality.

In spite of whatever the reasons were for justifying a tax amnesty, tax evasion will not be defeated until tax laws are thoroughly and seriously amended. If tax pressure is not reduced, the tax system is regressive, and the economy will not reactivate. We have to go to a system that eradicates the equation of a few people paying for many, preventing that many take advantage for evading payment or for paying as little tax as possible.

With an oppressive tax pressure over tax payers and with high labor costs, jobs creation is very difficult. Companies opt for employing fewer people. We are in a situation with no exit, among the exorbitant labor benefits of workers, the excessive legal defenses available to the labor force, extremely high indemnities and the developed industry of judicial proceedings. It is necessary to start a serious negotiation that looks for achieving the necessary balance between the parties for thinking in creating new jobs.

Intellectual rights

Our country gained more prestige in the fight against trademark piracy than in the fight against patent piracy and other IP rights related crimes. Nevertheless, the country has lost such prestige. Focussed on attempting to block foreign piracy, the same crime originated within the national territory has increased by omission. Our country has appeared in the “Special Report” on intellectual property rights and patent violations of the United States Foreign Trade Department for 20 years, and is one of the eleven countries with the highest piracy rates. Government should combat piracy crimes from all fronts, since this will also allow the collection of tax payments; terrorism and drug trafficking would not have accessible funds and owner's property rights would be protected. The current government is addressing these issues and it is necessary to negotiate and deal with them without hypocrisies, clichés and labels that belong to the past.
If we persuade investors to make investments in our country, where evaders are rewarded, tax pressure is oppressive, labor costs are high, the industry of judicial proceedings prevails, and government takes no measures to combat piracy, instead of encouraging investments we are causing alarm among investors. The correct way has been outlined, it tends to be long and difficult to go through, but in the end high benefits and positive results will be obtained.

SENA & BERTON MORENO was founded in 1937 by ALFREDO SENA and ERNESTO E. BERTON MORENO as a Patent and Trademarks Agency with a stable staff of only four people. Since then, the Firm has grown to reach its current size of forty people, working at our offices located only two blocks away from the Government House and at the heart of the commercial and financial district of the city. Ver más