Juan Fourcaud - Oficina de Presupuesto del Congreso

FISCAL IMPACT OF BILL 6960-D-2020 TO MODIFY THE INCOME TAX REGIME FOR INDIVIDUALS

by Juan Fourcaud | Mar 17, 2021 | Cost Estimates

This report analyzes the proposed modification of the fourth category income tax and evaluates the potential impact on public sector revenue.
The proposal includes an increase in special exemptions to leave without effect taxation for gross monthly salaries lower than AR$150,000 and reduce the tax burden for those higher than AR$150,000 and lower than AR$173,000.
With respect to pensions based on personal work, it is proposed to modify the specific exemptions, increasing it from 6 to 8 guaranteed minimum salaries.
The Bill includes the delegation of powers to the Executive Branch with respect to the interpretation of subsection c) of Section 30 of the Income Tax Law.
According to OPC’s estimate, the fiscal impact of what is explicitly specified in the Bill would imply a reduction in income tax revenue of AR$34.14 billion which, if a formula introduced by AFIP in the informative meetings of the Budget and Finance Committee of the Chamber of Deputies were to be applied for more than 225,000 taxpayers with salaries between AR$150,000 and AR$173,000, would increase to AR$47.57 billion.

IMPACTO FISCAL DEL PROYECTO DE MODIFICACIÓN AL IMPUESTO A LAS GANANCIAS HUMANAS EXPTE 6960-D-2020 Y PROYECTO DICTAMEN – MARZO 2021

NOTA COMPLEMENTARIA AL INFORME SOBRE IMPACTO FISCAL DEL PROYECTO DE MODIFICACIÓN AL IMPUESTO A LAS GANANCIAS SOCIEDADES EXPTE 0002-PE-2021

BUDGET EXECUTION OF SOCIAL INVESTMENT IN CHILDREN AND ADOLESCENTS – UPDATED AS OF DECEMBER 31, 2020

by Juan Fourcaud | Mar 15, 2021 | Policies on specific population groups

During 2020, 88.7% of national expenditure related to children and adolescents was allocated, firstly, to supplement family income and, secondly, to guarantee adequate nutrition, policies closely linked to the mitigation of poverty and indigence.
For these purposes, AR$860.5 billion were used out of a total of AR$969.7 billion allocated by the national government to the policies for children and adolescents.
In 2020, national expenditure related to children and adolescents represented 3.6% of the estimated GDP for the year and 13.8% of total expenditure.

In December 2020, 8,507,522 allowances were paid, of which 47.4% were family allowances for children and children with disabilities and 52.6% were universal child allowances (AUH – Asignación Universal por Hijo) for social protection.
Child allowances cover approximately 62.3% children and adolescents in the country.
Due to the fall in economic activity, coverage for children of registered workers was reduced since the end of 2019 by 472,289 beneficiaries (children and adolescents); while AUH coverage increased by 179,191.
The physical goals on vaccination of children against diseases foreseen in the official calendar showed low execution percentages, without exceeding in any case 40% of those projected. The delivery of fortified milk was 33.9% lower than expected.
The Ministry of Social Development assisted a 268.9% higher than expected number of community kitchens, and 35.4% of additional food supplements were delivered.

PUBLIC DEBT OPERATIONS – FEBRUARY 2021

by Juan Fourcaud | Mar 11, 2021 | Public Debt Operations

The Treasury obtained financing in the market through two auctions for a total of AR$304.6 billion in February
The maturity of the BONAR 2021 held by Banco Nación was paid in February for a total of AR$43.5 billion in interest and amortization.
Interest was paid on the IMF Stand-by loan for the equivalent of USD313 million.

ANALYSIS OF NATIONAL GOVERNMENT BUDGET EXECUTION – FEBRUARY 2021

by Juan Fourcaud | Mar 10, 2021 | Budget Execution

National government resources had a real increase of 7.0% in February compared to the same month of the previous year.
Primary expenditures increased by 14.4% year-on-year (YoY) and total expenditures by 9.1% YoY, a moderate increase due to a reduction in the payment of interest on the debt (-31.4% YoY).
Because of these dynamics, both the primary and financial balances were negative: AR$76.1 billion and AR$116.4 billion, respectively, a decline compared to a year ago.

Expenditures related to the pandemic accrued approximately AR$21.4 billion, without which primary expenditures would have expanded by 9.6% YoY.
Pensions and expenditure on personnel decreased at rates of 7.0% YoY and 11.7% YoY, respectively, in comparison with the February 2020 records.
Social Security resources were the item with the sharpest decline (10.4% YoY), caused by the reduction of tax rates to alleviate the employer’s burden during the pandemic and the lower taxable base of salaries, which grew less than inflation.
Subsidies increased 224.0% YoY.
Capital contributions to Aerolíneas Argentinas were the main reason for the increase in financial investment, which grew 41.1% YoY.
Through February, AR$5.9 billion was spent on the purchase and transportation of vaccines against COVID-19, which is equivalent to 43.3% of the appropriation allocated for this purpose.
The cumulative primary balance as of February shows a surplus of AR$62.5 billion.

ANALYSIS OF NATIONAL TAX REVENUE – FEBRUARY 2021

by Juan Fourcaud | Mar 8, 2021 | Tax Revenue

Tax revenue amounted to AR$ 716.6 billion in February 2021, which implied a growth of 51.9% year-on-year (YoY).
For its part, inflation-adjusted revenue expanded by 7.9% YoY, the sixth consecutive improvement and the highest growth since May 2018.

Wealth Tax had a real increase of 189.4% YoY because of both the increase in rates and scales provided by the Solidarity Law and the rise in the exchange rate, applied to assets held abroad.
Export Duties increased 117% YoY because of the nominal improvement in the exchange rate, the increase in exportable goods and the low base of comparison since many operations of last year were anticipated at the end of 2019.
PAIS Tax collected AR$5.98 billion in February, the first nominal decrease of 20.6% as a result of further restrictions on the purchase of foreign currency and the limitations to travel abroad.
Revenues from VAT increased by 6.1% YoY thanks to increased customs revenues due to the exchange rate. However, VAT DGI continued to decline (-6.7% YoY), which is a warning sign about the dynamics of the level of activity.
Social Security revenues were down 9.6% YoY due to lower registered employment and declining real wages recorded since June 2018.

ANALYSIS OF NATIONAL GOVERNMENT BUDGET AMENDMENTS – FEBRUARY 2021

by Juan Fourcaud | Feb 12, 2021 | Budget Amendments

The Budget Law passed by the National Congress is amended during the year in accordance with the delegation of powers arising from the regulations in force. Within this framework, it is important to analyze such amendments to provide updated data on the budgetary dynamics throughout the fiscal year.

To this end, these periodic reports focus on the analysis of budgetary amendments made by administrative decisions of the Chief of Cabinet of Ministers (JGM) or by Necessity and Urgency Decrees (DNU).