Argentinian Casino Offers to Pay Tax Bill with Construction Equipment

Posted on: October 20, 2022, 07:36h. 

Last updated on: October 20, 2022, 01:08h.

A casino operator in Argentina has come up with a novel approach in trying to avoid a tax bill. It is offering to give the government construction equipment in lieu of money.

Dynapac road compactor
A Dynapac road compactor sits inside a quarry. A casino operator in Argentina wants to exchange a similar product for its tax liabilities. (Image: YouTube)

In late September, Casinos de Misiones, a company with gaming properties across Argentina, thought it would approach tax collection from a different angle. It offered the municipality of Leandro N. Alem a “self-propelled asphalt compactor” in exchange for not paying taxes for eight years.

It’s likely that the tactic would have never reached the public’s eyes, except that it became a matter of public record. The government followed protocol, exploring the legal and regulatory avenues it has available, according to media outlet Revista Enterate.

Roads Not Paved with Gold

Casinos de Misiones sent the letter to Leandro N. Alem Mayor Waldemar Wolenberg on September 26. In it, the company offers a “Dynapac self-propelled, vibrating road roller with a smooth drum” in exchange for a tax break.

The agreement that the casino intended to make with the municipality is an advance payment of municipal fees for the next eight years. In other words, the municipality couldn’t collect any type of taxes or fees from the casino until 2031.

It isn’t clear in the letter if the machinery is new or used, making it difficult to ascertain its value. However, the company is confident it’s worth enough to cover any tax liability until after the new decade.

City council officials discussed the proposal in a recent session. They then forwarded it to Leandro N. Alem’s Ways and Means Committee for further analysis.

At each stop along the route, city representatives reached the same conclusion. The proposal isn’t feasible, since the municipality doesn’t have the legal authority to charge fees in advance.

In addition, they rejected the offer for the volatility of the currency exchange rate in the country and the constant rise in inflation. It would have been a huge coup for the company if the city had accepted, but the house didn’t win this time.

Rare and Crazy Scheme

City representatives said it’s “rare” that a casino business would offer road machinery in exchange for a break on future taxes. The situation would be different if it owed taxes that it couldn’t cover with cash.

Other council members called the proposal “crazy.” While they recognized that the city needs equipment to fix its roads, the solution Casinos de Misiones presented wasn’t the right way to solve the problem.

They agreed that it would be similar to mortgaging the income of the municipality for the next eight years. In addition, it would limit the decision-making capabilities of future mayors.

There were also concerns about the precedent the city would be setting. If it had said yes, any company could then introduce similar proposals to avoid future tax bills.

Leandro N. Alem – and other cities across Argentina – might have to deal with copycat proposals anyway. Casinos de Misiones said in its letter that it already has deals like this in place with other cities, including Jardín América, Montecarlo, and Puerto Rico.