Industry calls for cut in wages, tax suspension and “light” quarantine

The UIA gave him a document that proposes to make work more flexible, loosen isolation and enable banking operations. Next weeks are key

The pandemic changed CEOs’ work routines. The manager of a multinational company had more “conferences” this week than in the whole summer. The parent company machine-gunned him with consultations to find out what will happen in the coming weeks in Argentina. That vertigo climate was what led to the Argentine Industrial Union to make a package of “emergency measures“to face the imminent extension of the quarantine and its impact on the manufacturing sector. The Ministry of Production received it this week, but they have not yet called a meeting.

The eight-page document contains proposals aimed at reducing compulsory isolation and allowing greater economic activity in the industry and the logistics sector. This chapter includes the importation of necessary inputs for items considered essential, the substitution of imports and the elimination of obstacles for the circulation of all the means of transport of cargo before the closing of borders and the regulations established by provinces and municipalities. The contunity of operations at customs and Senasa is also claimed.

One of the most extensive and controversial sections is that of labor initiatives. Amid the suspensions and pay cuts that some companies began to adopt, the UIA proposes make work more flexible and facilitate access to wage subsidies (Repro) as well as Crisis Preventive Procedures. This last instrument was widely used in the management of Mauricio Macri and in 2018 allowed Carrefour to agree on a salary reduction. The idea of ​​the factory plant is that the plants do the same with the inactive workers.

Although the salary issue is not explicitly expressed, the issue is at the center of their concerns and, in fact, several of the initiatives raised suggest the adoption of this measure. Resolution 219/2020 revealed by iProfesional established that workers unable to work remotely will receive non-remunerated income. Industrialists, on the other hand, ask that their income be lower than that of those who carry out tasks. For this reason, the Association of Industrialists of Buenos Aires (Adiba) -associated with the UIA- and the Economic Federation of Buenos Aires (FEBA) requested this Friday that only that minimum, vital and mobile salary be paid to that category of employees. .

Within the labor chapter, the UIA also proposes to extend the essential workers to the production chain of food, medicine, supplies for the health sector and export sectors. Also the basic inputs of continuous production (petrochemical, aluminum, steel, cellulose, refining, etc.). Techint, for example, already applies this criterion. There is also a restriction on the use of licenses issued by the Government for those over 60, pregnant women and groups at risk, along with a reduction in employer burdens.

Financially, they ask for the enabling the cash deposit and the operation with checks for the companies. The Government partially addressed these claims by authorizing the return of the bank clearing, but the entrepreneurs point to operational problems and the need to respond to the wave of bounced checks expected due to the lack of market liquidity.

In fact, one of the main fears is the difficulty of facing commitments, without cash income for the economic situation. In addition to the payment chain, there is concern about the settlement of wages. The BCRA adjusted incentives for banks to give loans to SMEs to pay salaries at a rate of 24%. But the measure is seen as insufficient. “We are five days away from paying salaries and we are complicated, today the banking system does not work,” said a member of the entity’s board of directors.

Finally, the industrialists’ emergency plan contemplates tax relief by suspending or postponing maturities, lowering tariffs and stimulating foreign trade.

Industrialists know that the President is focused on keeping social conflict in the province of Buenos Aires under control and fine-tuning the health system along with the food supply network before the peak of contagion. They also take it for granted that the compulsory isolation will continue until end of may. “Alberto Fernández gave a very strong definition yesterday (Thursday): health prevails over the economy,” said a manager, who interpreted the official speech as a demarcation of Donald Trump and Jair Bolsonaro.

Following that premise, the Executive announced in recent days measures for AUH beneficiaries, informal employees and SMEs. The freezing of the rental quota is also expected. But in the UIA they warn that big companies are not going to endure April without measures for the sector. In this framework, they sent the officials the document inspired by the policies of Spain, Germany, Brazil, England, Japan and France to “face the emergency that both employers and workers in the industrial sector are going through”.

1. Financing and payment methods

General objective: Quickly provide liquidity and improve credit access conditions (terms, amounts, rates, requirements, grace periods) to companies, monotaxers, self-employed workers and families to face the lower external and internal demand.

– Line of advances in current account and discount of checks at low rates (badlar – 10%) for the amount equivalent to the wage bill.

– Extension of maturities of working capital, consumer (card / personal) and mortgage / pledge loans for 30 days (or whatever the exceptional measures provided last).

– Create / fund financial instruments to give liquidity to companies, monotributistas and self-employed:

– Enable cash and check deposit for companies: companies that operate in a high percentage with cash will not be able to pay salaries at the end of March. Enable with shift delivery, a reduced schedule of attention for companies for these purposes.

– Enable the operation of the electronic check clearing house suspended until March 31, since it generates an interruption in the payment chain, making payments and collections impossible, which will affect the payment of wages. (This request was contemplated by the resolution of the Central Bank that allowed the operation with checks to return from Thursday, although the employers request additional measures in fear that the lack of liquidity will cause a flood of bounced checks).

– Enable capital markets or the operation of Common Investment Funds of banks to guarantee liquidity of companies for the payment of wages. Many SMEs have their cash availability invested in these instruments (FCI Money Market) so as not to lose purchasing power and avoid investment tax in fixed terms.

2. Production and distribution

General objective: to guarantee access to supplies and logistics to supply the demand of the industry and the population in a context of global uncertainty.

– Creation of a public-private articulated Logistics Committee (with the participation of all levels of government, gendarmerie and business chambers) to monitor the operation of transport and logistics, to disseminate transport protocols and supplies of essential products and foreign trade during the period of the emergency measures.

– Ensure the supply and import of inputs to guarantee the continuity of production, particularly in the sectors considered essential.

– Promotion of national production for import substitution in strategic areas

– Guarantee the free transit of products and supplies for production, by air, land, sea and river means throughout the national territory and in international trade, eliminating total or partial impediments to the load, or to the crew of the vehicle arranged by some provincial and municipal governments, applying agreed sanitary precautionary measures.

– Guarantee the operation of the distribution centers (warehouses) to allow the distribution of food, medicines, beverages, transportation of cash, etc.

– Guarantee the internal and international transport and logistics of the exporting sectors to allow their continuity.

– Guarantee the continuity of the Customs and SENASA operation at the border, in international ports and airports to allow international transport, as well as the operation of maritime agencies, customs brokers, control entities (ANMAC, SEDRONAR), fumigators, stevedores , port staff.

– Digitization of port processes to reduce the concurrence of personnel in the port and facilitate the provisioning of the industry.

3. Labor

General objective: create the conditions that guarantee the continuity of the production process, protecting the integrity and health of workers. Specific measures:

– Allow employers to modify the organization of work (shifts, teams, multifunctionality) to protect the integrity of workers and the continuity of production, mitigating the effects of absenteeism. It is advisable to eliminate for the duration of the emergency the requirement of approval of crisis prevention procedures.

– For the purposes of differential treatment for workers between 60-65 years old, include in the staff that is considered essential all the workers that make up the food production chain, the medicine production chain, the input production chain for the health sector and the production chain of exporting sectors. This also includes the packaging, paper and cardboard packaging, distribution, etc. sectors.

– In addition, incorporate as sectors considered essential those of production of basic inputs that are of continuous production (petrochemical, aluminum, steel, cellulose, refining, etc.), given the impossibility of interrupting its operation (since the reactivation takes between 6 and 8 months).

– All health personnel in establishments and all those “essential personnel for the proper functioning of the establishment” are also considered essential at the employer’s discretion.

– For the granting of licenses for the care of children and adolescents, in the case of households with more than one adult in charge, the adult who does not integrate the value chains considered essential must be prioritized.

– Accelerate the granting and expand funding to the REPRO program for the assistance of companies in crisis.

– Establish the requirement for personnel to present DDJJ reporting personal situation in relation to the possibility of contracting Coronavirus, due to contact with possible cases.

– Establish the obligation to immediately report the results of the Coronavirus test to the employer.

– Exempt from paying employer contributions for licensed personnel (vulnerable groups, special licenses, people arriving from abroad, with dependents).

– In case the crisis continues or deepens, exemption / reduction of employer contributions to all personnel to sustain employment.

– Establish a special regime for hiring temporary work without social charges for essential sectors.

– Incorporate to the exceptions the guards or emergency personnel, in services or companies “not essential” for technical maintenance. Today the unions do not want to leave the technical guards interpreting the DNU in a restrictive way.

4. Tax

General objective: to alleviate the tax weight in companies, monotributistas and self-employed affected by lower demand. Extend deadlines and tax burden so as not to affect employment and sustain production.

– Extension of tax maturities (national, provincial and municipal) and postponement of maturities of annual Sworn Declarations (if applicable, extend SME certificates whose renewal depends on these DJs), for 30 days or whatever the measures last exceptional arranged.

– Extension of the period of adherence to the AFIP SME tax moratorium for 30 days (or whatever the exceptional measures established last) and launch of a moratorium / payment plan for large companies.

– Allow to apply tax credits generated by tax on debits and credits to the payment of national taxes, including customs or social security (currently it is only taken into account for payment of profits, minimum presumed profit and special contribution on the capital of cooperatives). o Either a suspension of the tax on credits and debits for 30 days (or for the duration of the exceptional measures provided) to promote electronic transactions.

– Acceleration of the return of the balances in favor of the companies (technical balance of VAT, refunds, special regimes)

– Acceptance of public securities at technical value to apply in tax balances.

– Assimilate the tax treatment of investments with own capital to those made through bank debt to allow the necessary investments to be made while the emergency lasts.

– Suspension of all advance payments and refund of balances in favor of gross income companies.

5. Foreign trade

– Extend the term for the advance payment of imports when the origin of the shipment is China or another region whose foreign trade is affected by the pandemic, currently the maximum period for the entry of loads in cases of advance payments is 180 days.

– Measures to sustain exports and enhance their increase, incorporation of export sectors as essential sectors, elimination of export duties and increase of reimbursements, launching lines for export pre-financing.

– Extend the current terms of liquidation of exports for an additional 30 days in each case (or what the exceptional measures provided last), given the delay that is being registered in foreign trade operations.

– Suspension of the collection of the statistical rate for 30 days on imports of inputs for production and exports of national products (or whatever the exceptional measures provided for) last, to give financial liquidity to local producers, until the measures are effective .

6. Energy

– Suspend the collection of penalties imposed on the energy sector for those who buy in the wholesale market, as well as the distributor sector.

– Allow SMEs and energy-intensive companies to make the payment of fees in installments or extend maturities for 30 days and, in case the measures are extended, without application of internal taxes.

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