The bill proposes to share with the provinces 50% of tax on credits and debits revenues that are currently allocated entirely to ANSES (National Social Security Administration), after deducting the portion that is earmarked for AFIP (Federal Administration of Public Revenues) (1.9%).

• ANSES would have a decrease in revenues equivalent to 0.77% of GDP.
• Of this portion, the National Treasury would recover 0.30% of GDP without specific allocation. The provinces as a whole would receive 0.45% of GDP and ATNs (Contributions from the National Treasury) and the Judicial Branch 0.01% of GDP.
• The proposed amendment is based on an agreement with the governors to offset the drop in the shared revenues resulting from the changes in the Income Tax.
• Between 2004 and 2023, Income Tax revenues averaged 1.64% of GDP and 6.80% of national revenue. Successive regulatory changes during this period had an impact on the distribution of these resources.

The aviation security tax paid by passengers on domestic and international flights to the Airport Security Police (PSA, by its initials in Spanish), the collection of which is not part of any item detailed in the national budget, is proposed to be eliminated.

• According to PSA data, ARS4.901 billion were collected in 2023 and ARS8.94 billion are expected to be collected in 2024, based on the projection of the collection for the January-March term (ARS2.789 billion).
• The resources are earmarked for the maintenance and updating of equipment for the optimization and modernization of the infrastructure and operating methods of the airport security system, but cannot finance the hiring of personnel for the provision of PSA services or the granting of incentives to its agents.
• In 2023 revenues from the aviation security tax represented 9.5% of the total budget executed by the agency.

This report complements the report published by the OPC on May 2, 2024, entitled “Fiscal impact of bills on pension benefit adjustment – Reports from the Committee on Social Security ”1 and includes the Report submitted by Propuesta Republicana (PRO).

For the purpose of estimating the fiscal impact of each Committee Report, a comparison is made between the pension benefit adjustment formula being proposed in each bill and the adjustment formula in force, approved by Decree of Necessity and Urgency (DNU) 274/24. Likewise, a comparison is made with the formula in force up to March of the current year, established by Law 27,609.

The analysis is based on the macroeconomic assumptions made by the Ministry of Economy for the fiscal year, considering that the new regulation would be applied as from May. The formula under Law 27,609, was applied from January to March, and the one provided for by DNU 274/24 was applied in April.

The formula provided for in the bill establishes an expenditure equivalent to 7.21% of GDP (including bonuses), which would imply 0.38 p.p. more than the formula under Law 27,609 and 0.07 p.p. more than with the formula of DNU 274/24. In addition, the bill requires the National Executive Branch to cover the fiscal cost associated with the measures provided by means of a reduction in tax expenditures, as established in Section 2 of Regulatory Decree 1,731/2004.

ERRATA: This report replaces the version published on 05/14/24.
The bill extends the term of the Income Compensation Fund for Cotton Production (FCIPA), increases its budget and proposes an automatic annual update linked to the price of grade 2 diesel oil determined by YPF.

• Resources totaling ARS13.5 billion would be allocated to the FCIPA this year.
• The Cotton Fund was first included in the budget in 2006, but without a credit allocation. As of 2007 a budget of ARS25 million was allocated and ARS500 million in fiscal year 2024, which has not been executed to date.
• Updates will be made on an annual basis, according to the percentage difference in the variation of the price of GRADE 2 diesel oil determined by YPF S.A. as of September 30 of each calendar year.