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Argentina – Buenos Aires sets deadline for López tax payment

By - 23 March 2016

An envoy of President Mauricio Macri has been sent to inform gambling entrepreneur Cristóbal López that he has one month to repay a tax debt to the City of Buenos Aires of an estimated $4bn pesos.

The debt has been accumulating since 2003 for gross income on revenue generated by slot machines located underneath the racetrack in Buenos Aires. It is the most recent development in a long running saga between the city of Buenos Aires and the central government and Macri’s ultimatum would seem that the issue is finally coming to a head.

In 2014 it was believed that the issue of the taxation had finally been resolved when it was reported that a deal had been struck between the Government of the Autonomous City of Buenos Aires and the national government whereby the city of Buenos Aires would receive an additional $300m pesos annually from Lopez, 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.

According to the agreement, the city would have been paid an additional $300m pesos annually from gambling from 2014. In addition, the agreement provided that the National Lottery would also transfer an additional fee which would have been paid by gaming operators which would have been the equivalent of 3 per cent of the net profits generated by both the floating casinos and the slots based in the Palermo Racetrack. In return, the measure contained an exemption from the payment of gross income tax for the gambling establishments based within the city limits and the casinos would no longer have to pay the debt in gross gaming back taxes. However soon afterwards Mauricio Macri, who was then Mayor, denied that a deal had been struck over the back taxes and the back tax clause was later suspended by a city judge.

Mauricio Macri won the presidential election in December and his Cambiemos (Let’s Change) party now holds power over the City of Buenos Aires and the executive branch. Mayor of Buenos Aires Horacio Rodriguez Larreta and Macri have already begun to negotiate the transfer of gaming to the jurisdiction of the City of Buenos Aires which means major changes are on the way for how gaming is run and taxed.

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