Government formalizes financial aid to the provinces for $ 120 billion

According to the provisions, the National State will allocate 60 billion pesos to the Program this year, from the Contribution Fund of the National Treasury

The Government officially ordered this Thursday, by decree, the creation of the Provincial Financial Emergency Program, for a total amount of 120 billion pesos, through the allocation of Contributions from the National Treasury and the granting of loans channeled through the Trust Fund to Provincial Development.

According to the provisions, the National State, through the Ministry of the Interior, will allocate 60 billion pesos to the Program this year, from the Contribution Fund of the National Treasury.

The Ministry of the Interior will assign the corresponding contribution to each participating jurisdiction, which will be distributed in installments, in accordance with the criteria established for this purpose.

The Executive Power also established that the National State will transfer to the Trust Fund for Provincial Development another 60 billion pesos, in order for it to assist the provincial jurisdictions that request it by granting loans.

The loans to be granted by that Trust Fund must be repaid in 36 monthly, equal and consecutive installments, with an interest of 0.10% nominal annual and will be calculated on the capital adjusted by the Reference Stabilization Coefficient (CER) prepared by the Central bank.

Interest accrued from each disbursement will be capitalized until December 31 next.

To ensure compliance with the reimbursement obligations, the interest accrued and the penalties provided for in the Bilateral Agreement, each province will assign as collateral the amounts that it may receive under the Federal Tax Sharing Scheme.

Meanwhile, the Trust Fund must return to the National State the amount equivalent to the loans it has granted, transferring the reimbursements made by the participating jurisdictions of the Program.

The Ministries of the Interior and the Ministry of Economy must, now, dictate the interpretative, clarifying and complementary norms to which the decree published this Thursday would give rise.

In addition, Economy was empowered to make all the necessary adjustments and modifications to the Budget of the Trust Fund for Provincial Development.

The Casa Rosada justified this measure by pointing out that the health and social crisis “has an impact on the normal functioning of the provincial administrations, which see the need to meet greater demands for expenses in a context of falling collection of national and provincial taxes “

“This situation requires extreme efforts to face the health emergency and mitigate the effects of the restrictive measures in place, which affect consumption, production, the provision of services and commercial activity, with the consequent decrease in tax collection,” he added.

And he also considered that the weight of debt services is added that, in some provinces, “financial problems that hinder the normal fulfillment of their commitments.”

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