The Ministry of Finance and Public Administration has launched a extraordinary mechanism that will allow the local entities pay “in a more agile way” to providers in 2022 and pay outstanding obligationsoldest payment s of those entities that have a supplier payment term of more than 30 days, which is the maximum established by law. The bill for the sanctioning regime of the law against delinquency has been paralyzed in Congress for more than a year. This financing instrument was included in the General State budget law for 2022 and it has been carried out through a resolution issued on January 7 by the General Secretariat of Regional and Local Financing (SGFAL).
In order for providers to be able to charge through this mechanism, the regulation obliges the affected administrations to communicate their pending invoices prior to July 1, 2021 already adhere to financing fund for local entities, through which the payment of said obligations will be made directly.
The number of local entities affected by the measure is 1,640, the majority town halls. In addition, 670 dependent entities of the above are included. However, of all of them, they only have to take advantage of this measure those with invoices and pending payment obligations prior to July 1, 2021.
Works, services and supplies
The condition that the supplier must meet in order to have the right to collect their invoices through this procedure is that they are obligations generated by works, services or supplies pending payment before July 1, 2021, and accept this means of payment, which they can do on a computer platform enabled by the Tax agency. The objective is to guarantee suppliers the collection of the oldest pending invoices, those prior to the aforementioned date of July 1, 2021, that have with the local entities that have accredited an average period in the payment of their obligations greater than 30 days in December 2020 or in March or June 2021.
In order to be able to know exactly the amount pending payment, the affected local entities must send electronically and with electronic signature to the Ministry of Finance and Public Function, until next February 11, a list of all pending payment obligations prior to July 1, 2021, through the aforementioned computer platform.
Suppliers will be able to consult the inclusion and the amounts of the invoices pending payment. In the event that they do not appear on the list, they may claim the local entity, providing the necessary documentation, to issue an individual certificate. The term that suppliers have to consult and accept the collection of said invoices through this procedure begins on February 12 and ends on February 25, 2022.
The objective of this plan will be only guarantee the sustainability of the financial situation of the municipality, that is, that it has sufficient financing for public services and to address its current expenses and the amortization of debt operations, according to the Treasury. In the event that the local entities do not approve an adjustment plan, they will not be able to formalize these loans. In addition, the amounts paid by the financing fund to local entities will be returned by withholding their participation in State taxes.
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.