Tax payment with Public Bonds

Decree Nº 2243/2002, issued by the Executive Power, reinstalled the possibility of cancelling federal taxes with public bonds, although it established a month quota of $80,000,000 which tax payers will accede to through a bidding process.

This mechanism will be in force until a law regulating the use of the public bonds to cancel taxes, according to the budget possibilities of each of the future fiscal years, is enacted.

The following ar the characteristics of the implemented regime:

1. The regime provided in Decrees Nº 424/2001, 1615/2001, 1005/2001 and 1226/2001 is suspended for the payment of federal tax with public bonds for a 90 days term counted from September 6, 2002.

2. The transfer of the above mentioned bonds is also suspended for the same term.

3. Within a period of 45 days counted from September 6, 2002, the Securities Clearing Agency will inform the stock of public bonds registered as of such date to the Finances Secretary.

4. The holders of both Fiscal Credit Certificates and Tax Option Exercise Certificates already registered in the Securities Clearing Agency as of the entry into force of Decree Nº1657/2002 can return to the original public bond.

5. A monthly quota is established, until a law regulating the use of the public bonds to cancel taxes to the budget possibilities of each of the future fiscal years is enacted.

6. To use this monthly quota a bidding process is established, whereby the holders of public bonds must make tax cancellation offers composed with the ratio between pesos and detail of public bonds. After reviewing of the offers received monthly quota provided will be assigned to taxpayers who have offered the highest ratio of pesos vis-a-vis bonds until the quota is complete.