Juan Fourcaud - Oficina de Presupuesto del Congreso

PUBLIC DEBT OPERATIONS – OCTOBER 2020

by Juan Fourcaud | Nov 12, 2020 | Public Debt Operations

Placements of securities were made, and loan disbursements received for the equivalent of USD6.76 billion in October, of which AR$148.24 billion (USD2.09 billion) were for auctions for marketable securities in pesos. For the first time this year, dollar-linked bonds were auctioned, resulting in the placement of new instruments for USD3.43 billion.

On the other hand, the equivalent of USD4.87 billion of principal was canceled, mainly due to maturities of Treasury bills in pesos. There was a net cancellation of BCRA (Central Bank of the Argentine Republic) Temporary Advances for AR$125.78 billion (US$1.6 billion), of which AR$100 billion were a pre-cancellation made in the last week of the month.

Debt service maturities for November and December are estimated at the equivalent of US$13.2 billion, which is reduced to approximately US$7.7 billion if holdings within public sector are excluded.

Following a request from Argentina, talks with the IMF formally began to negotiate a new program to refinance the debt with the IMF for approximately US$45 billion.

ANALYSIS OF NATIONAL GOVERNMENT BUDGET EXECUTION – OCTOBER 2020

by Juan Fourcaud | Nov 11, 2020 | Budget Execution

Excluding the profits transferred by the Central Bank to the Treasury, the revenues of the national government fell in October by 11.0% in real terms with respect to the same month of the previous year, while primary expenditures grew by 22.9%, mainly due to the health emergency. The primary deficit totaled AR$75.1 billion.

The BCRA (Central Bank of Argentina) transferred $30 billion in profits during October, which explains the 5.5% increase in Property Income.
The national government allocated approximately AR$77 billion to mitigate the economic effects of the COVID-19 crisis in October and for the seventh consecutive month, primary expenditures grew by double digits. Without this allocation, they would have grown at a slower rate of 4.5%.
Debt interest of AR$31.1 billion was accrued, 73.1% less than last October. This explains why total expenditures only grew by 2.1% in the month.
The financial balance went from a deficit of AR$54.8 billion in October last year to a deficit of AR$106.2 billion in October this year.
The slight real improvement of 0.5% YoY in current revenues was driven by Income Tax and Wealth Tax, which partially offset the fall in other taxes.
Civil service personnel expenditure fell by 9.0% YoY, while pensions increased by 1.9% YoY.
Energy subsidies totaled AR$24.4 billion, an increase of 42.8% YoY.
Capital transfers to government-owned companies in the transportation sector had a real growth of 351.9% YoY, basically for the urban railroads and the Belgrano Cargas.
The initial budget for the year increased by AR$2.7 trillion – 56.5% with respect to the initial appropriation – and 62.7% of this increase was allocated to reinforce social benefits.

ANALYSIS OF NATIONAL TAX REVENUE – OCTOBER 2020

by Juan Fourcaud | Nov 6, 2020 | Tax Revenue

National tax revenue showed a real increase of 6% in October, the second increase recorded so far this year, partly due to adjustments in the tax deadline calendar and the relaxation of social isolation; and the lower comparison base against October 2019.

Total revenues totaled AR$642.1 billion, which implied a nominal growth of 43.9% year on year. This growth in revenue is explained by the gradual increase in the level of activity but mainly by the collection of the second installment of the payment facilities for Income Tax and Wealth Tax, which this year operated in August.

The revenue from the first income tax levied on transactions subject to PAIS tax also had a positive impact.
In absolute terms, the taxes that most contributed to the nominal increase in revenue were Income Tax (31%), Value Added Tax (21.3%), Wealth Tax (17%) and Social Security resources (15.7%). PAIS Tax decreased its share due to greater restrictions applicable to taxable transactions. For this reason, it contributed only AR$8.5 billion.

BUDGET BILL 2021 – PRELIMINARY APPROVAL BY THE CHAMBER OF DEPUTIES

by Juan Fourcaud | Nov 4, 2020 | Budget Law

On October 28, the Chamber of Deputies gave preliminary approval to the National Budget Bill for 2021, after the introduction of several amendments whose impact on total national resources projected is estimated at AR$13.29 billion, which is equivalent to 0.04% of the Gross Domestic Product (GDP).

The amendments introduced represent an increase of expenditures of AR$295.6 billion, of which AR$35.04 will be financed by reductions in budget appropriations foreseen for items defined in the preliminary approval. Therefore, the net increase reaches AR$260.56 billion, equivalent to 0.7% of GDP. This net increase must be financed with reallocations of existing budget appropriations and implemented by means of an Administrative Decision of the Chief of Cabinet of Ministers, as set forth in the Bill.

FISCAL IMPACT OF BILL ON SUBSIDY FOR THE IMPORT OF DIGITAL SERVICES

by Juan Fourcaud | Nov 3, 2020 | Cost Estimates

Bill S-2286/2020 states that the economic context resulting from the pandemic has led to a growth of micro and small enterprises in Argentina, many of them highly dependent on the internet.

In this framework, the Bill proposes a tax relief for the imports of digital services for entrepreneurs consisting in the exemption of PAIS tax and VAT for imported digital services, provided that such imports are made by entrepreneurs or Venture Capital Institutions in accordance with Law No. 27,349 of Support to Venture Capital.

It is estimated that the fiscal impact would imply a drop in tax revenues of AR$3.28 billion for the year 2021.

FISCAL IMPACT OF BILL ON SUSTAINABLE FAMILY FARMING (S-1156/20)

by Juan Fourcaud | Oct 28, 2020 | Cost Estimates

The purpose of Bill S-1156/2020 on Sustainable Family Farming is to promote agroecology and encourage healthy consumption habits to contribute with the creation of a sustainable food system in Argentina and to guarantee the human right to adequate food.

The purpose of this report is to evaluate the fiscal impact of the Bill, at the request of the Senate Budget and Finance Committee. The analysis considers the version sent to OPC on October 22, 2020.