The mayor of the autonomous city of Buenos Aires Mauricio Macri has denied reports that gaming operators in the city limits will be let off a massive $2.4bn pesos in back taxes.
The Mayor said: “The City would not overlook the debt of gaming companies.”
He seemed to deny reports that the new deal struck last week between the city and the national government would allow gaming operators to avoid paying years of back taxes on gross gaming tax revenue.
Although Mr Macri has yet to make any further announcements on the issue it would appear that the government has no intention of surrendering the debt accrued by staunch ally of the Cristina Kirchner administration gambling entrepreneur, Cristóbal López whose company Casino Club has the right to run the slot machines in the racino in downtown Buenos Aires and has a significant share of the floating casinos moored permanently to the city harbour.
Reports began to emerge earlier this week regarding the new deal where it seemed that the tax exemption had been agreed upon in order to finally end the long standing stalemate when it comes to the city and the government over the issue of gaming. While most of the terms of the agreement are not in doubt the city government has taken issue with reports of a huge tax write off.
According to the new law, the city will be paid an additional 300 million pesos annually from gambling from 2014. In addition, the agreement provides that the National Lottery will also transfer an additional fee which will be paid by gaming operators which will be the equivalent of 3 per cent of the net profits generated by both the floating casinos and the slots based in the Palermo Racetrack. It was believed that in return, the new law contained an exemption from the payment of gross income tax for the gambling establishments based within the city limits and that casinos would no longer have to pay a debt of between an estimated $1.5bn pesos and $2.4bn pesos in gross gaming back taxes.
The city mayor was quick to react and published his statement via twitter the day after reports emerged. Meanwhile, head of the city cabinet Horacio Rodríguez Larreta clarified the statement saying that: “Nowhere in the agreement is there any talk of debt forgiveness.”