Producers in Azul, a town in Argentina, have filed a legal challenge against a new rate for “Essential Services” introduced by the town’s mayor, Nelsón Sombra. The producers initiated a claim seeking protection to suspend payment of the new rate and challenge its constitutionality after discussions with various councilors and the incoming mayor failed to prevent the ordinance from being passed.
The new rate was approved by the Deliberative Council of the town and imposed a heavy tax burden on agricultural producers. Concerned about this, over 190 producers representing approximately 190,000 hectares of land filed a joint claim with the Justice. A separate group of producers also initiated legal action to stop the tax.
The rate began being collected in January and was met with resistance from the producers due to its cumbersome payment procedure which involved a personal visit to the municipality to split the bill for the new tax. Only a fraction of the total expected revenue from the new tax had been received.
The original conception of the rate was as a tax equivalent to one liter of diesel per month per hectare and two liters of diesel per field, with proceeds intended for covering various services like health, education, sports, and transportation. However, significant pressure from producers and residents led to modifications being made to this project. The revised rates varied according to location of property and ranged from half a liter of diesel per month per hectare to two liters of diesel per field.
In response to their legal challenge, farmers won their desired result as they were able to suspend payment while contesting its constitutionality. Meanwhile, residents were considering other implications such as paying closing costs on cash purchases before purchasing or selling their properties.