The reality of Argentine entrepreneurs is arduous.
With growing inflation, the highest taxes in the world, Kafkian regulations, and overflowed labor costs, it is not surprising that in Argentina only 15% of the economically active population has a venture and that the majority of microenterprises Do not exceed two years of life.
This reality worsens if we talk about the ventures of people with low incomes, according to a work done by Libertad y Progreso in association with Atlas Network in the city of Buenos Aires, Tigre and San Miguel.
That is why Libertad y Progreso, in their work, entitled “Desregular para Emprender”, suggests the 10 measures that local entrepreneurs need and campaign candidates should announce to really make a difference:
1) Flex tax payments
2) Lower the requirement of papers, stamps and digitalize the procedures
3) Unify the criteria to give certificates and permits
4) Improve the communication of the collection agents to the taxpayer
5) Flex the requirements to import and export
6) Simplify the qualification as an importer
7) Unify audits
8) Encourage training
9) Generate emergency banks
10) Implement a “MiniJobs” type plan
Flex tax payments: Among so many papers, vouchers, invoices that are issued and certifications of public bodies, the Argentine entrepreneur is totally overwhelmed.
Some controls should be eliminated directly as in the case of the COT (Code for Transfer Operations) and IIBB (Gross Revenue).
For example, if a truck with merchandise cannot leave for some reason, there should be grace time for the entrepreneur to trade and present the invoice or paper due in the following days. It should not be necessary to require so many approvals to trade. The fact is that if a certificate cannot be obtained due to an unforeseen event, the commercialization is blocked until such problem is solved.
More important is to order the times when some taxes are paid, especially IIBB. The problem is that a liquidity problem is generated. When an entrepreneur sells, he must pay IIBB, the problem is that the income from the sale money usually takes place three months later, for example when a 90-day check is cashed. This difference suffocates the entrepreneur. In addition, in a context where IIBB is one of the most difficult taxes to settle. This tax must necessarily be reduced (if not eliminated).
Lower the requirement of papers, stamps and digitalize the procedures: Many papers must be submitted more than once. Transporting papers is a waste of time. It would be a great advance that once progress was made with one procedure, I would be seated in the next one that the papers are in order.
For this, it is important to work on internal communication between the different agencies. In other words, when the entrepreneur is going through level 5 of procedures, an internal system already knows that those papers were correctly presented in the previous procedures.
On the other hand, there are also complaints about having to be carrying company bylaws to carry out procedures. To avoid this, it would be advisable to issue a paper or credential certifying that the statutes are in order. Of course, the optimum would be to digitize the procedures as much as possible
Unify the criteria for issuing certificates and permits: In the event that certificates approved by state agencies are needed to trade, it is important to find a way to unify this requirement.
It is deficient to have to present four times the same certificate to perform an operation. Going to a specific case of the refrigeration industry, as an example, has to send practically the same invoice to AFIP, AGIP or ARBA, SENASA and again AFIP, it is inefficient.
The agencies mentioned are state-owned and should find a way for one of the various agencies to issue the certificate so that SMEs can trade instead of relying on four different approvals.
Improve the communication of taxpayers to the taxpayer: It is true that the ideal suggestion is a reduction in tax pressure. But in addition, it is necessary that information and communication be improved as far as the payment of taxes is concerned.
It is not a good sign that if an aliquot is increased, several entrepreneurs find out three years later with fines and accrued interest. As soon as a change is imposed, communication to the entrepreneur must be impeccable.
Flexibility of requirements to import and export: Prohibit import or export due to taxes against freedom of trade. In a country where so many taxes are collected and macroeconomic imbalances persist, the requirements for paying taxes should be softer. Minimally allow a margin of debt. Otherwise, the need to take credit, sometimes at high rates, is increased in order to pay taxes in order to import.
Simplify the qualification as an importer: Just as it is important to unify certificates to trade, it would also be good for organizations that request authorizations to import to be unified. Again, there is an excess in the bureaucracy that a refrigerator needs authorizations from Customs, SUCCA and SENASA.
Unify audits: It is not bad that audits are carried out, but it should be achieved at least that the requirements of the auditors are similar.
In our analyzed case, we indicated that, on the one hand, SENASA requested an ideal temperature for the refrigerator while Buenos Aires requested another.
All these details continue to add to the amount of information that an entrepreneur deals within his head and that takes away human capital to create wealth. The optimum would be to aim for a single organism to deal with this.
Encourage training: It is key to encourage training for entrepreneurs to improve their business. Training courses are not usually missing, but there is little communication of their existence. Or on more complicated occasions, in the most vulnerable neighborhoods, lack of time for having to take care of the housework. In the latter case, it would be interesting to work on demand to help them. You should also train not only in legal and financial matters, but also in the use of technology and networks to boost sales.
Generate emergency banks: An alternative could be that the Municipality or an NGO can grant some type of credit only for issues where a health problem makes it impossible to work. Of course, this should have a limit of months and effective control so that false cases of diseases do not begin to be generated. That is why it is important that the loan be with an interest rate (low).
Implement a “MiniJobs” type plan: In 2003, Germany implemented what was called the “MiniJobs”, low-paid contracts, but with a maximum of 15 hours of work per week.
The salary for that job was € 400 (62.5% of the minimum wage). But if we assume a 9-hour workday, 33.3% of a full day is worked to obtain that salary. Mainly adhered to distributors, household cleaners, child or elderly caregivers, waiters. That is, jobs that do not require higher qualification.
The objective of this measure is to function as a kind of bridge job until the worker can get a better job. Or that works as an additional income to another job. For now, it would be good to foster a work culture in order to reduce the number of people who depend on plans.
That is, this measure should also be thought of as a bridge (that works) and temporary (a priori) job. In September, a minimum wage in Argentina was $ 15,600, which compared to what can be received by a social plan, it is very difficult for the private sector to be competitive.
In order to apply a similar idea in Argentina, at least the following requirements should be met:
1) End macro imbalances with structural reforms; the proposal would be to find that the salary of the “MiniJobs” is around 65% of the Minimum Vital and Mobile Salary for working three hours;
2) Unlike the German case, the employer only pays a symbolic tax (2-3%), since the tax burden in the private sector is enormous;
3) If someone who has a social plan accesses a “MiniJobs”, start charging a smaller proportion of the social plan.
4) That people can have more than one “MiniJobs”. If a second “MiniJobs” is added, the proportion charged by a social plan would be reduced again. If you charge a third “MiniJobs”, that person is already practically employed because he would work 9 hours and he would no longer receive the social plan in its entirety .; Encourage the training of workers to be permanently employed.
It is important to think about the possible solutions and also the possible risks that they could bring.
Be very attentive to “what is seen and what is not seen” to avoid making mistakes. Among the potential risks that such a measure could bring are the following:
1) That the salary of the “MiniJobs” be paid and that the person work more hours in black;
2) That the situation be considered to show it as a “drop-in unemployment”.
In addition to these ten concrete proposals, one should also aim to continue reducing the number of procedures even further to a minimum possible. In this sense, the change of mentality