Warning to the Governor of the City of Buenos Aires about Taxes on Monetary Policy

The BCRA President, Miguel Pesce, requested the Governor of the City of Buenos Aires, Horacio Rodríguez Larreta, to refrain from imposing a tax on a monetary policy instrument aimed at achieving monetary, financial and exchange rate stability, and reminded him that the Supreme Court had already ruled on the districts’ lack of power to make any measure that may affect the BCRA’s regulations.

In a letter sent today, Pesce noted: “I am writing to request you to take any necessary actions to refrain from imposing taxes on the instruments on which the BCRA may relay to achieve monetary, financial and exchange rate stability in fulfilment of its functions and purposes set out under Section 3 of its Charter.”

He also stated that “the revenue-raising powers of the City of Buenos Aires should by no means be deemed as unlimited.” He also reminded the governor that, “the tax design and subsequent enforcement of tax provisions can in no way affect the purposes and functions that have been assigned to the BCRA in the aspects discussed above.”

President Pesce pointed out the ruling of the Supreme Court of the Argentine Republic under which the legislative acts of the different jurisdictions cannot affect any aspects that concern the regulation delegated by the National Congress to the BCRA. Indeed, the Court ruled on the case Banco Credicoop Cooperativo Limitado c/Entre Ríos, Provincia de s/Acción declarativa de certeza on March 26, 2014. “The duties inherent to the BCRA’s role pursuant to its Charter must not be affected or distorted by any provisions such as the enforcement of the tax that the Governor of the City of Buenos Aires seeks to levy,” said Pesce.

The BCRA’s President finally requested the Governor of the City of Buenos Aires to “take any necessary measures to prevent the execution of actions that may distort, hinder or be in conflict with the policies carried out by the BCRA; otherwise, the monetary and financial policy will sustain irreparable damage at the national level.”

December 11, 2020.