Analysis of National Tax Revenue – October 2019

Analysis of National Tax Revenue – October 2019

In October, tax revenue totaled AR$446.17 billion, which implied a growth of 42.8% YoY. In the annual cumulative figure as of October, tax resources of the National Public Sector show a 46.8% YoY growth. Revenue decreased by 5.9% YoY in real terms in the tenth month of the year.

October revenues were reduced by the impact of the fiscal stimulus measures announced by the National Executive Power during the month of August. According to OPC estimates, those measures caused a loss of resources of around AR$35 billion last month. Excluding this effect, nominal revenue would have grown 53.9% YoY, and 1.4% YoY in real terms.

The measures mentioned above particularly affected the collection of Income Tax, Social Security and VAT. On the other hand, Export Duties increased in October with respect to the previous month because of a higher number of tons for export.

Methodology for calculating Tax Expenditure

Methodology for calculating Tax Expenditure

This paper introduces a conceptual discussion aimed at developing a practical methodology for the evaluation of differential tax treatment policies. A two-stage process is proposed; one technical and one political. The first of these stages is the object of study of this paper.

For the development of this evaluation stage, the existing definitions on the concept of tax expenditure, the economic and practical foundations of the use of differential tax treatments as an economic policy tool to the detriment of other instruments are studied, and different methodologies for calculating tax expenditure of an economic measure are described.

Among the mistakes to avoid, the OPC warns against considering that financing public policy through tax expenditure measures is less expensive than financing it through direct expenditure.

Economic Analysis of Law 27,430. Tax Reform 2017

Economic Analysis of Law 27,430. Tax Reform 2017

The tax reform provided for by Law 27,430 would have a lower effect on tax revenue in 2018 than officially estimated to date due to the delay in the regulation and implementation of the measures adopted within this framework.

At the end of this year, this reform would result in a decrease in tax revenue of nearly AR$23.5 billion, equivalent to 0.2% of GDP, only one third of the 0.6% of GDP estimated by the Secretariat of Economic Policy.

The impact will be greater as the changes are consolidated, but the volatility of the tax system and its sensitivity to macroeconomic situations makes it difficult to give a precise estimate of the future.

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