Fiscal Bulletin

The Federal Commitment ("Compromiso Federal por el Crecimiento y la Disciplina Federal"), which includes the Provinces, the Government of the Autonomous City of Buenos Aires and the Federal Government, was ratified by Law No. 25.400 on 7 December 2000.

Said Commitment establishes that during fiscal 2001 all transfers to provinces (Revenue Sharing and Earmarked Funds), by application of Law No.23.548 and its complements and modifications, as well as Laws No.23.966, No.24.130, No.24.699, No.24.464, No.25.082 and any other regulation allocating or distributing earmarked revenue shall amount to 1,364 million pesos monthly.

This monthly amount, of automatic and daily transfer, is guaranteed by the Nation and is both a floor and a ceiling for the transfers, and is not subject to the level of collection of taxes both current or to be created in the future. It should be noted that the Treasury shall transfer the stipulated monthly amounts to the Provinces.

Furthermore, the Federal Commitment stipulates that the distribution of funds shall continue to be as is established by the current revenue sharing laws and earmarked funds, until the amount mentioned is reached.

According to Clause 20 of the Federal Commitment, funds transferred to the Autonomous City of Buenos Aires are no included in the amount stipulated, except for funds to the National Housing Fund.

The methodology used maintained the percentages of the monthly amount for fiscal 2000 (1,350 million pesos), except in those cases where current regulation stipulated fixed amounts (Service Transfers – Law no. 24.049; fixed Amount Income – Law No. 24,699, Compensation Fund for Imbalances, GBA Fund, Greater Rosario Fund and Transfers to Electricity Companies).

The share of each regime within the total monthly amount (1,350 million pesos) for fiscal 2000 was established according to the average of the transfers to all the provinces during the period 1998-1999, maintaining transfers equivalent to fixed amounts by application of the current regulations.

During the first quarter of year 2001, the total federal revenue transferred to the provinces came to 4,151.5 million pesos, i.e., 1% above the amount transferred during the same period 2000.

The following chart shows a summary of the comparative amounts distributed to the Provinces in the first quarter of years 2001 and 2000.

I t e m	Cumulative I Q 2000	Cumulative I Q 2001	Differences	Variation %
Automatic Transfers	4.048,6	4.087,7	39,1	1%
Non Automatic Transfers (*)	57,6	63,8	6,2	11%
Total	4.106,2	4.151,5	45,3	1%

Automatic transfers to the provinces grew in the first quarter 2001 by 39.1 million pesos, i.e., an increase of 1% on the previous year.

Since the level of collection was insufficient to comply with the amount stipulated by the Federal Commitment in each of the regimes, the Treasury transferred 346.8 million pesos to the Provinces guaranteed for the first quarter 2001, which accounted for an increase of 37.9% in comparison with the previous year.

The main components of the guarantee are the Fuels Tax and the Revenue Sharing System.

The surplus is calculated net of the amount which, should the Federal Commitment not have been implemented, would have entered the Pension System (SIJyP) by application of Law No. 25.082 and thus in both cases is not transferred to the provinces. Using this methodology the surplus totalled 125.8 million pesos.

The following chart shows the composition of the fixed monthly amount for each of the regimes:

Federal Revenue Sharing	895,8
Service Transfers	109,0
Compensation Fund for Imbalances	45,8
Education Fund	0,4
Income (1)	136,7
Monotribute	5,6
VAT – Social Security	10,5
Personal Assets Social Security	3,3
Personal Assets Law Nº24.699	28,0
Fuels (2)	115,8
Electricity (3)	13,1
Total	1.364,0

(1) – Basic Unsatisfied Needs, GBA Fund, Surplus of the GBA Fund and Fixed Amount Income Tax Law Nº24.699.

(2) – Infrastructure Works, Road Agencies, FO.NA.VI. (includes share of the Autonomous City of Buenos Aires, according to Section 21 - Law Nº25.400) and F.E.D.E.I.- Fuels

(3) - F.E.D.E.I.-Electricity, Compensation Fund for Electricity Rates and Transfers to Electricity Companies.

Non automatic transfers rose by 11%, due to a substantial rise in Contributions from the Treasury (A.T.N.).

During the first quarter 2001, these discretional transfers increased 24.6 million pesos, which is equivalent to an increase 116.6% regarding last year.