The improvement contributions They are taxes based on the acquisition of a benefit or an increase in the value of the assets of certain people, as a result of an expansion of public services or the performance of public works.
The legal nature of this type of tax is found in the increase in the value of the interested party's assets, due to the execution of a public work. The nature of these taxes is mandatory, since their objective is for the taxpayer to obtain a benefit, which arises thanks to the construction of public works.
This is a useful mechanism in the cost-benefit relation to be able to carry out public works, with challenges and opportunities that may arise in its implementation, since it allows additional resources to be raised to those provided by the usual means.
Thus, the State seeks to fulfill its mission of providing citizens with a common good through actions that cause social benefit, thus completing its social work, in addition to building works.
These contributions are supported by the benefit obtained by the owners of the properties surrounding or close to the work: they must pay a proportional amount destined to the payment of the public work, which can be of a very diverse nature.
They constitute an effective financial tool for public works, ideal to be used in cases where it is possible to measure and identify the additional benefit it will have for the community, by benefiting a certain group of subjects from said work.
It is a monetary tribute that the State collects and private capital must pay it with money, in a similar way to the case of fees and taxes. For the State to be able to demand these contributions, it must be a work that is of public utility.
While fees are charged each time a public service is used, and taxes are collected periodically, the State collects the improvement contributions when carrying out public works, paying them only once..
Taxpayers benefiting from improvements to their property are obliged to pay the corresponding contribution before the execution of a public work, due to the greater value that their property acquires..
The State obtains the tax by verifying that the taxpayers acquire a direct benefit when carrying out a public work.
Any work that has the purpose of building, creating, conserving, expanding, modifying or demolishing real estate that by provision of the law or by its nature is intended for common use or a public service.
It is the technical activity that the public power carries out, destined to satisfy in a continuous, regular and uniform way the needs of the community. Its provision does not produce any tax burden for the concept of rights.
Technically established territorial demarcation is considered, up to whose limits public works or the provision of public services generate an indirect or direct benefit to the taxpayers who contribute or their properties.
The State is the creditor or applicant of this tax obligation, because it has the power and obligation to require the payment of the tax..
Those who have the obligation to pay the contribution of improvements that have been established are the legal or physical persons who will benefit directly from the construction of the public works:
Holders or possessors of urban, communal or communal real estate, located within the profit zone.
Co-owners of real estate subject to the condominium regime, located within the benefit area.
Also called fiscal unit, it is the amount or net value assigned to the improvements, on which the contribution that the taxpayer must pay is determined..
There are basically two types of improvement contributions: infrastructure and public services:
The rate that will correspond to pay to the taxpayers who benefit directly from the performance of public works will be a percentage determined by the law on the usable value of said work..
This rate must be paid through fixed fees to each taxpayer, according to what the law establishes. The corresponding National Commission will determine these fees for each particular case..
The amount to be paid will be determined by dividing the amount of the usable value of the work by the number of years that comprise the term granted to taxpayers..
This total contribution amount will be multiplied by the percentage allocation given to each taxpayer, the result being the amount of the contribution to be paid per taxpayer..
The corresponding National Commission will notify each beneficiary of the tax credit to be paid, either semi-annually or annually..
This amount will be updated over time, according to price changes in the country, applying an update factor.
This factor is obtained by dividing the National Consumer Price Index registered in the year to be paid by the monthly index registered when the usable value was published..
Roads, streets, paving works or widening of streets, buildings, bridges, sidewalks, green areas, defense works against water, fences, etc..
Electric lighting, sewer drainage works, sewerage, a channel for drainage, restoration of public works, etc..
In Latin America there are countries with experience in the use of improvement contributions, such as Ecuador, Colombia, Brazil and Mexico, but other nations do not consider this tool as a mechanism added to traditional sources to finance public works.
Costa Rica, Bolivia, Paraguay, El Salvador, Venezuela and the Dominican Republic have legal support for the contributions of improvements, but their application has been null due to lack of political will.
The use of improvement contributions in the municipality of Rafaela is highlighted. Although it is the third municipality in the province of Santa Fe, there is a fairly good culture of payment. This is because the contributions of improvements are not seen as a tribute, but the contributors themselves are the ones who ask for the works..
If compared to the large cities of Latin America, the US $ 2.4 million raised in the last decade in this municipality is not much. However, works are continuously carried out, with a wide participatory mechanism.
Nearly US $ 8,900,000 was raised between 2012 and 2013 from improvement contributions, a considerable amount for just two years. The collection policy according to ability to pay stands out, making exemptions to people with limited resources.
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