As Governor Axel Kicillof moves forward with his initiative to facilitate significant investments, he is motivated by a competitive push concerning the installation of YPF’s LNG plant in a dispute with Rio Negro. In this context, Guillermo Montenegro, the mayor of Mar del Plata, announced that his municipality will adopt the National Government’s Incentive Regime for Large Investments (RIGI).
Montenegro recently held a press conference highlighting the significance of the national project, which was approved by Congress after extensive discussions. He expressed a clear vision for his city to become “a city of opportunity” that actively seeks and encourages investments, offering supportive measures that enable private sectors to grow and generate genuine employment.
The mayor emphasized the need to attract investments in crucial sectors such as technology, infrastructure, and tourism. He also mentioned that his team is developing a local incentive regime with additional advantages and a threshold for investment that is lower than the national requirement.
“I have asked my team to start designing a local incentive regime with its own advantages,” he stated. He is contemplating a threshold for investment applications that would be below the $200 million limit set by the national law. He also expressed support for any national efforts to establish a Mini RIGI aimed at small and medium-sized enterprises (SMEs).
Meanwhile, Kicillof is refining the details of a legislative project intended to create a Provincial Strategic Investment Promotion Regime, focusing on the planned LNG plant by YPF and Petronas. However, this provincial initiative has yet to be submitted to the legislature, a move expected after the winter recess. Preliminary discussions on the matter have included communications between Kicillof and former president Cristina Kirchner regarding feasibility and economic requirements.
Interestingly, the LNG plant project predates the enactment of the Bases Law, and proponents from Kirchnerism use this as a valid argument for locating the facility in southern Buenos Aires, citing the existing infrastructure of the Ingeniero White port in BahÃa Blanca.
On Monday, Carlos Bianco, the Minister of Government for Buenos Aires, argued that BahÃa Blanca is the most suitable location for the LNG plant. He highlighted the existing logistical advantages, such as roads and pipelines necessary for operation. He also mentioned that the RIGI provisions are already in effect for the province, pending state regulations. Bianco emphasized the need for Buenos Aires to adhere to RIGI to provide fiscal stability, particularly concerning provincial taxes like gross income and stamp duties that could affect these investments.
The RIGI proposal is expected to include exceptions for provincial taxes related to large investments. A major discussion remains whether these tax incentives will automatically apply to all projects or whether each investment will undergo scrutiny. Kicillof’s announcement has prompted accelerated discussions around similar legislative proposals in the Buenos Aires Legislature. Notably, one proposal from opposition senators offers 100% exemption from real estate taxes for 15 years, then 50% for an additional 15 years, along with addressing gross income taxes.
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