Nicolas Perez - Oficina de Presupuesto del Congreso

ANALYSIS OF BILL “BASES AND STARTING POINTS FOR THE FREEDOM OF ARGENTINES” – REPORT 6 – CULTURE (SEC. 564, 584, 587-590, AND 599)

by Nicolas Perez | Jan 17, 2024 | 25-PE-2023_ENG, Cost Estimates

This report analyzes budget amendments planned in agencies related to culture. The report includes the following measures:

Repeal of the Law creating the National Theater Institute and reallocation of its resources. The funds that would no longer be received would be compensated with savings in expenses, thus not implying a net fiscal impact.
Repeal of the Decree-Law creating the National Arts Fund and reallocation of its resources. This could imply a fiscal cost of about 0.0004% of the GDP.
Repeal of Title V of Law 23,351, which created the Special Fund for Community Libraries. The resources that would no longer be received would represent about 0.0006% of the GDP, being impossible to determine the impact on the expenditure side.
Modification in the resources received by the National Institute of Cinema and Audiovisual Arts. The tax resources that the agency would no longer receive from the tax on recorded videograms would represent an amount equivalent to 0.0024% of GDP.
Amendment to the Law of Creation of the National Institute of Music as regards the resources of the Financing Fund, which would be determined by the Secretariat of Culture of the Nation. The measure would not imply a fiscal impact since the specific allocation would remain in force.

ANALYSIS OF BILL “BASES AND STARTING POINTS FOR THE FREEDOM OF ARGENTINES” – REPORT 5 – PRIVATIZATION OF STATE-OWNED ENTERPRISES (SEC. 8 AND 11)

by Nicolas Perez | Jan 17, 2024 | 25-PE-2023_ENG, Cost Estimates

Sections 8 and 11 of the Bill establish that state-owned enterprises are subject to privatization and authorize the Executive Branch to sell its share in those in which the State does not have control, a situation in which the approval of Congress is not required for a potential sale.

During 2023, transfers and contributions to state-owned enterprises totaled ARS2,301.385 billion, equivalent to 1.22% of GDP.
Most of the funds were current transfers and the rest were capital transfers, but these contributions are not directly related to the operating result.
As of October, 134 thousand workers were employed in the companies. Operadora Ferroviaria S.E., YPF S.A., Banco de la Nación Argentina, Correo Oficial de la República Argentina S.A., Aerolíneas Argentinas S.A. and AYSA accounted for almost 77%.
The lack of data on the net worth and market value of each company and of information regarding transfers and contributions in relation to the operating result does not allow estimating the fiscal impact of future actions enabled by the Bill.

JANALYSIS OF BILL “BASES AND STARTING POINTS FOR THE FREEDOM OF ARGENTINES” – REPORT 4 – DEBT CONSOLIDATION (SEC. 221-227)

by Nicolas Perez | Jan 16, 2024 | 25-PE-2023_ENG, Cost Estimates

The Bill provides for the total cancellation of the intra-public sector debt through the transfer to the Treasury of the securities held by National Public Sector (NPS) entities, including the Sustainability Guarantee Fund (FGS), which would be eliminated.

The total stock of securities held by the NPS and FGS entities as of December 31, 2023, amounted to the equivalent of USD41.173 billion, most of them payable in pesos.

After consolidation, the total stock of public debt denominated in dollars would fall to USD327.299 billion.
At year-end 2023, 70.9% of the FGS’s asset portfolio consisted of public debt instruments.
The consolidation of the FGS’s holdings would reduce public debt by the equivalent of USD38.043 billion.
Of the holdings subject to consolidation, 92.4% belong to the FGS.

ANALYSIS OF BILL “BASES AND STARTING POINTS FOR THE FREEDOM OF ARGENTINES” – REPORT 3 – TAX MEASURES – FIRST PART

by Nicolas Perez | Jan 13, 2024 | 25-PE-2023_ENG, Cost Estimates

This report presents the analysis of a first group of the tax measures contained in the Bill “Bases and Starting Point for the Freedom of Argentines”, as well as an estimate of their fiscal cost wherever possible. The report includes:

The Regime on Regularization of Tax, Customs and Social Security Obligations provides greater benefits than those granted by current regulations. The fiscal impact of this Regime is not estimated due to the large number of assumptions that should be made with respect to individual taxpayers’ decisions.
Tax on the Transfer of Real Estate of Individuals and Undivided Estates. The Bill proposes the elimination of this tax, which in the absence of a regulatory change would have meant an estimated revenue of 0.0153% of GDP in 2024.
The increase of Export Duties in force, or their application on non-taxed positions could increase revenues by 0.42% of GDP.
The fiscal transparency regime for consumers, which obliges to differentiate VAT on invoices regardless of the tax category of the purchaser, has no fiscal impact.
The Incentive Regime for Large Investments does not reduce tax revenues because it involves new projects which, if implemented, would generate a tax expenditure due to the promised tax benefits.

ANALYSIS OF BILL “BASES AND STARTING POINTS FOR THE FREEDOM OF ARGENTINES” – REPORT 2 – PROMOTION OF REGISTERED EMPLOYMENT (SEC. 214-220)

by Nicolas Perez | Jan 13, 2024 | 25-PE-2023_ENG, Cost Estimates

With the purpose of promoting registered employment, these sections offer incentives to the employers that join the regime within 90 days after the implementation of the law, by forgiving them at least 70% of the amounts owed for lack of contributions to any legal subsystem, with the elimination of fines, legal actions and other penalties and the removal of labor law violations from the records.

The fiscal impact of the regularization regime depends on the number of employees that are formalized, a number that is still unknown.
There will be a cost for the Government in the short term and an eventual improvement in revenues for the Social Security System resulting from this formalization.
It is not possible to prepare a comprehensive estimate without precision on the number of workers to be formalized or the stock of debt for contributions due to deficient records.
In 2023, the contributions for each registered labor relationship amounted to approximately ARS1.92 million, of which ARS1.79 million were resources that remained in the public sector.
Last year, fines for Social Security infractions amounted to ARS1.813 billion, equivalent to 0.001% of the GDP.

ANALYSIS OF BILL “BASES AND STARTING POINTS FOR THE FREEDOM OF ARGENTINES” – REPORT 1 – PENSION BENEFITS ADJUSTMENTS (SEC. 106)

by Nicolas Perez | Jan 13, 2024 | 25-PE-2023_ENG, Cost Estimates

Section 106 of the Bill suspends the mobility of quarterly adjustments for pension benefits and family allowances, subject to the evolution of salaries and ANSES (National Social Security Administration) resources and grants the Executive Branch the power to set the updates without defining a parameter to be used. This prevents a precise estimate of the fiscal impact but allows describing possible scenarios according to the criteria adopted by the Executive Power in the future.

If there were no increase during the year, pensions would suffer a 69.9% deterioration in their purchasing power, and social security benefits would fall from 6 to 4.5% of the GDP. Half of the beneficiaries would be indigent and 33% of them would be in poverty.
If there were adjustments only for the lowest income beneficiaries, the loss for those who receive three or more minimum pensions would be 69.9%. ANSES would have a surplus of 1.2% of GDP and social security benefits would represent 5% of GDP.
If all pension benefits were increased in the same proportion according to the evolution of ANSES funds, the average loss would be 19%. If this strategy were to include a priority for those with lower incomes, the loss for the rest would rise to 40%.
If all pension benefits were increased by inflation, there would be no loss of purchasing power and the ANSES deficit would rise to 0.8% of GDP.
From the application of the current adjustment formula (2021) until December 2023, minimum pensions that received full bonuses suffered a loss of purchasing power of 3.6% and the rest of 36.5%.
The decoupling between prices and pension benefits began in July 2022, when inflation accelerated.