Juan Schiaretti, Governor of Córdoba : Interview

Interview : Juan Schiaretti

How is the province supporting the development of local business, especially small and medium-sized enterprises (SMEs)?

JUAN SCHIARETTI: Córdoba has two local regulations to promote industrial development. The first – the Law of Industrial Promotion No. 5230 – applies to big companies, granting exemptions from provincial taxes for 10 years. Second, to promote SME development, Law No. 9727 provides these same exemptions, as well as the possibility for increased subsidies with the creation of each new job and greater electricity consumption. Law No. 9727 also created a public programme to raise starting capital for the development of new products or services.

Lastly, Law No. 10.351 was introduced in June 2016, creating the Córdoba Innovation and Entrepreneurship Agency to provide co-financing between the public and private sectors for proposals carried out by local entrepreneurs.

What can be done to promote the integration of local auto parts and services for multinationals?

SCHIARETTI: We have sought to encourage local production through Law No. 27.263, the Regime of Development and Strengthening of Argentine Auto Parts Act, which enables greater participation of local manufacturers in new, domestically developed car models. The Córdoba auto parts companies that participate in these projects further benefit from our aforementioned industrial promotion laws.

What steps are the provincial authorities taking to increase competitiveness?

SCHIARETTI: The province of Córdoba has been introducing measures to streamline tax collection and increase equity. Since 2015 we have implemented policies in line with the Tax Equity Programme. As the name suggests, this policy aims to achieve an equitable and innovative tax framework, with a commitment to transparency, administrative simplicity and sustainability.

Furthermore, the Fiscal Consensus – which Có rdoba joined as a signatory on November 16, 2017 – established guidelines for a broad and gradual reform of federal and provincial taxes with the objective of rationalising the tax structure, reducing taxes and promoting economic growth. The various provinces agreed on guidelines to harmonise their tax frameworks, and Córdoba reduced its gross income tax rates. This was achieved by eliminating preferential treatment for some taxpayers, as well as restructuring quotas and exemptions from gross income tax so they no longer exceed the limit agreed upon in the Fiscal Consensus. These adjustments will be made gradually over a period of five years.

In the first half of 2018 the Córdoba government collected AR21.8bn ($1.1bn) in taxes, a 29.3% yearon-year increase. Had there been no reduction in quotas, tax collection would have grown by around 34.6%, which translates to an additional AR894m ($46.3m) entering the provincial economy.

How is Córdoba working to attract greater levels of foreign direct investment?

SCHIARETTI: Córdoba remains friendly to foreign direct investment, as evidenced by the significant presence of companies from a variety of sectors and countries. International firms will continue to receive the same treatment as local ones. Any business that chooses to locate in the province will benefit from a government willing to collaborate with them, as well as highly qualified professionals, technicians and manpower.

Further contributing to the local human capital, the province has 14 universities with 250,000 students in various disciplines. Seven of these centres for higher education and approximately 150,000 of these students are centralised in the capital city.