Mercedes Benzvia Prestige Auto, its representative in Argentina, has implemented an initiative for its customers related to the government’s proposal to abolish internal taxes, as announced by LA NACION days ago.
The automobile promised a bonus for those who buy vehicles between December and the end of Januaryconsisting of Refund of these taxes if their elimination is determined by the end of this month. This measure seeks to mitigate market uncertainty in the face of a possible price dropwhile the labor reform project, which includes the abolition of these taxes, is being discussed in Congress.
With the signature of President Javier Milei, the government submitted to Parliament the labor reform project, which provides in Article 192: proposes the abolition of the internal tax law. This would cover articles like Insurance, cellular and satellite phone services, luxury properties, motor vehicles, recreational or sport boats and aircraft.
This tribute is popularly called The “luxury tax” had already undergone a change at the beginning of the year. On this occasion, the first 20% scale was removed and the remaining 35% scale was reduced to 18%, which was effectively 22% and is exactly what is now being removed.
Industry analysts believe that the eventual abolition of the tax would not only change the prices of the cars currently affected, but would also affect the entire supply in Argentina.
The suggestion caused them concern Premium brandsThe They fear a decline in demand until the reform is possible. “The best thing would be if it happens as soon as possible, otherwise it could cripple the market,” said one of the luxury carmakers.
César Litvin, tax lawyer and CEO of Lisicki, Litvin & Abelovich, explained THE NATION The Prices for taxed cars “can be reduced by up to 18%”. However, the effect would be more widespread and would produce one “General downward adjustment of prices, because when a car with better quality lowers its price, it forces those that are close to each other in that amount to adjust.”indicating downward pressure in various areas.
Litvin pointed this out The effects are not immediately visible and describe two clear phases. In the first case, “traders who have inventory and have already paid internal taxes will have to adapt gradually in order not to operate at a loss.”
The second stageIn the medium term, “a lot of movement” can be observed in the market. It is important to remember that domestic tax is paid on the first sale, whether nationalizing an imported vehicle or selling from factory to dealer if it is domestically manufactured. Should the measure be sanctioned, the consumer would be unlikely to pay a tax that has already been repealed, potentially causing a temporary disruption.
He The phenomenon of lower prices may not be directly applicable to all segments. This is what Sebastián Domínguez, a tax official, told this media “The terminals often engage in price management to balance the situation.”. Given the elimination of the tax, this could mean that “the luxury car no longer falls as much and this margin is transferred to the middle class car.”
Therefore, it will be crucial to monitor how prices reconstitute in the market. In addition, when the measure comes into force, an estimated period of three months will elapse between the issuance of new import orders, their entry into the country and their subsequent marketing.
Another problem, this The abolition of the tax is intended to eliminate the distortion caused by the regulation. Ernesto Cavicchioli, CEO of Hyundai Argentina and President of the Chamber of Official Automobile Importers and Dealers (Cidoa), commented to this medium: “Thanks to internal taxes, prices are not subject to pressure from below. This results in some models being loose because their competition was artificially 20% lower.“Abolishing these taxes would lead to a fairer competition scenario.
Within this framework of expectations, the Mercedes-Benz initiative with Prestige Auto offers a concrete incentive. By refunding rebates on vehicles sold between December and January if the tax is eliminated before the end of the month, the company is trying to maintain sales and give buyers confidence at an important time for the industry.
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