OPC 5 Budget Law 5 BUDGET BILL 2021– ANALYSIS OF TAX RESOURCES

BUDGET BILL 2021– ANALYSIS OF TAX RESOURCES

October 20, 2020
OFICINA DE PRESUPUESTO DEL CONGRESO

The Budget Bill for the year 2021 estimates tax revenue at AR$6.46 trillion for 2020, and AR$9.3 trillion for 2021. The expected dynamics imply an increase of 28.6% YoY for 2020 and 43.9% for 2021.

OPC (Argentine Congressional Budget Office) estimates for 2020 a total national public sector tax revenue at AR$6.35 billion – AR$74.23 billion (1.1%) lower than the estimate made by the Ministry of Economy. For 2021, OPC’s estimates are up to AR$8.9 trillion – AR$395.47 billion lower than the 2021 Budget Bill projections.

In real terms, 2021 Budget Bill projects a revenue decline of 9% YoY for 2020, and a 9.7% YoY recovery for next year. OPC estimates that tax revenue will increase 6% YoY in 2021, a less positive dynamic than that projected in the 2021 Budget Bill.

OPC estimates that in 2021 the national government will receive 64.3% of tax resources (AR$5.98 trillion). Of this total, 35% (AR$3.26 trillion) will go to Social Security Agencies, 29.1% (AR$ 2.7 trillion) to the Central Administration, and 0.2% (AR$15.26 billion) to

Decentralized Agencies. Other entities will receive 3.7% of total resources (AR$341.99 billion), and the provinces 32% (AR$2.98 trillion).

The Budget Bill estimates that during 2021 tax expenditures will reach 2.64% of GDP (AR$995.8 billion). Of that total, 73.9% are related to special regimes included in the current tax legislation (AR$735.66 billion) and the remaining is allocated to various economic promotion programs (AR$260.14 billion).

These figures do not show significant changes with respect to 2020, a year in which the total tax expenditure is expected to reach AR$714.73 billion, equivalent to 2.63% of GDP, with a similar composition.

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