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3w ago

Argentina Abolishes Key Tax Break for SME Credit Guarantees to Fund Pensions

Financial institutions warn the change jeopardizes 35% of SME bank financing, risking a credit crunch.

Se elimina la exención en el pago del impuesto a las Ganancias para Sociedades de Garantía Recíproca (SGR).
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La modificación sobre el sistema de Sociedad de Garantías Recíprocas fue introducida en el proyecto de ley de alivio a los jubilados cuando se discutió en la Cámara de Diputados.
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Overview

  • The measure eliminating the income-tax exemption for contributions to SGR risk funds took effect after Senate approval of the pension bill on July 10.
  • Twelve market entities including national and provincial exchanges issued a joint communiqué demanding an amendment over fears for SME access to credit and employment.
  • Economy Minister Luis Caputo denounced the removal as “Inentendible,” accusing the ruling party of undermining national production.
  • Experts caution that protective partners may withdraw from SGRs without the fiscal incentive, halting new guarantees and prompting banks to reduce or reprice SME loans.
  • The tax break cost less than US$136 million annually (0.02% of GDP) while SGRs currently back over US$3.4 billion in financing and support more than 100,000 micro and small firms.