Provincial Governors challenge the President for reducing IVA on selected items

[elhombresinnombre]

It's been all over the news today: for example - https://www.clarin.com/politica/pro...a-pelea-rebaja-iva-ganancias_0_whJkKBh1h.html

What I don't understand is how any alteration of a federal tax (IVA is a federal tax isn't it?) can inflict consequences on the receipts of provincial governors and their departments. In the UK IVA/VAT goes straight to the Treasury and Treasury administer regional grants and payments etc without any direct link between the two - eg, if VAT receipts go down, the Treasury still has to pay out the same money to Local Government etc.

Could anybody please give me a Tax 101 lesson and explain how, in Argentina, a cut in IVA can cause direct consequences for regional receipts and spending?

Thanks!!!

 

[ben]

My guess is that the amount of money actually present in the till is far less of an issue in the UK than it is here.
Payments here from the federal government to the provinces are, if I’m not mistaken, massively delayed simply because there is no money - so the details of collection etc become extremely material.
This is also why the IVA discount is such a ridiculous gimmick.
They’re moving around money they don’t have, in the interest of transparently naked electioneering concerns.
As I said, it is a testament to how horrible the K clan is, that the market still prefers these buffoons.

 

[nicoenarg]

From the article, the coparticipacion is directly linked to a % of IVA, ganacians etc. Evidently does not work the same as the UK.

The governors involved also seem to be playing a political game.