In June, tax revenues grew 69% year-on-year in nominal terms and 12.8% adjusted for inflation.

The increase was driven by the depreciation of the exchange rate (37% YoY), the increase in international commodity prices and regulatory changes. But the main factor behind the increase was the low basis of comparison since a year ago the Preventive and Compulsory Social Isolation (ASPO) was fully in force.

  • Higher customs duties revenues (47.6% YoY) – due to the increase in the exchange rate and the recovery of imports – drove an improvement in VAT.
  • The nominal increase of the dollar and the values of exported goods promoted an increase of 59.1% in the collection of Export Duties (YoY).
  • Social Security resources increased for the third consecutive time in eight months, although the expansion of the wage bill has been systematically below the CPI since June 2018.
  • PAIS Tax collection contracted again in the year-on-year comparison.
  • The growth of the economy continues to be the main determinant of tax revenue, which fell steadily since mid-2018, due to a lower level of activity and the implementation of Law 27,430 on Tax Reform and began to recover after the worst effects of the measures adopted to contain the health effects of the pandemic.


Partially because of the low basis of comparison, national tax revenue increased 72.7% in nominal terms and 14.3% in real terms as compared to the same month of the previous year.

National Government revenues totaled AR$ 862.48 billion, which was the ninth consecutive month of increase (adjusted for inflation).

This behavior is partly explained by last year’s poor fiscal performance, when the mandatory isolation due to the health crisis was still in force, which lowers the basis for comparison.

The 39% nominal increase in the exchange rate also had an influence, which relatively improved the revenues from Export Duties and from the customs component of VAT, as well as from Income Tax. In addition, regulatory changes boosted the collection of shared taxes.

For taxes related to foreign trade, May 2020 also implied a low baseline, since the settlement of many transactions had been advanced to the end of 2019. An improvement in the international prices of exported goods also had an impact on the tax revenue increase.

In absolute terms, the taxes that most contributed to the increase in revenue were VAT (accounting for 30% of the increase), Income Tax (20.2%), Export Duties (18.3%) and Social Security contributions (19.6%), which rose for the second time in eight months.

The PAIS Tax collected AR$ 5.49 billion in May, which represents a nominal reduction of 53.8%, because of the greater restrictions on the purchase of foreign currency.

ANALYSIS OF NATIONAL TAX REVENUE – December 2020 and yearly total

ANALYSIS OF NATIONAL TAX REVENUE – December 2020 and yearly total

Driven by an incipient economic revival and the increase in Wealth tax rates, tax revenue grew 38% in nominal terms and 1.6% in real terms in December, registering for the fourth consecutive month an increase above inflation. However, in 2020, it suffered a real drop of 7.4% year-on-year, which doubled that recorded in 2019 and completed a cycle of three consecutive years of decline.

  • In the last month of last year, VAT revenues grew 11.7% YoY and recorded the first real increase in twenty-six months. But there were falls in Social Security and Export Duties resources since the rise in the exchange rate did not offset the fall in foreign trade.
  • The recessionary context, deepened by the pandemic, is the main reason why tax revenue has fallen in 23 of the last 25 months in real terms.
  • The annual drop in VAT (17.7%) tripled the drop recorded in 2019 and the Income Tax doubled its decrease (-7.1%).
  • The combination of a drop in registered employment and the lag of nominal wages with respect to the general price level makes the rate of expansion of the wage base to be systematically below that of the CPI since June 2018. Social Security resources fell 11.4% in real terms last year.
  • The improvement in the exchange rate did not prevent the decline in revenues from Export Duties (29.5%), partly conditioned by the advances in foreign trade operations made by the agro-industrial sector at the end of 2019.
  • Despite previous regulatory reforms to strengthen revenue, in the first quarter of last year there was already a real drop in revenues, prior to the beginning of the social isolation caused by the pandemic.
  • In April, inflation-adjusted revenues fell 23.7% YoY, the sharpest drop since April 2002, largely due to the decrease in activity caused by the Mandatory Preventive Social Isolation (ASPO).
  • Tax relief measures to alleviate the economic effects of COVID19 on taxpayers reduced tax collection by an estimated AR$79.2 billion in the first half of 2020.
  • The year ends with four consecutive months of positive variations.


Due to tax exemptions and promotional regimes, the Budget Law estimates that next year’s tax expenditure will be AR$995.8 billion, equivalent to 2.64% of GDP, a level comparable to that of this year.

Of this total, 73.9% consists of special tax treatments included in the current tax legislation (AR$735.7 billion) and the rest is for various economic promotion regimes (AR$260.1 billion).

  • For 2020, total tax expenditures are expected to reach AR$714.7 billion, equivalent to 2.63% of GDP and with a similar composition.
  • In the projection for next year, lower VAT collection stands out, with a total of AR$444.3 billion (1.18% of GDP); more than half of it is due to reduced rates on meat and vegetables.
  • Fuel Tax is the second largest tax expenditure, with AR$132.7 billion, mainly explained by the difference between the rates applied to gasoline and diesel fuel (AR$83.36 billion).
  • Nearly half of the reduced income tax collection (AR$85.5 billion) is due to the exemption applicable to the income of judges and officials of the national and provincial Judiciary.
  • The two promotional regimes with the highest tax expenditure are those of the province of Tierra del Fuego (AR$77.8 billion) and Knowledge Economy (AR$18.4 billion).

The deferral of tax payments, the accelerated amortization in Income Tax and early refund of tax credits in VAT are not considered tax expenditures; these measures are mainly contained in different promotional regimes.



The purpose of this report is to evaluate the consolidated tax burden on the meatpacking, metal-mechanic, supermarket, transportation, and hotel sectors in thirty locations in the country.

Under certain assumptions and without including some taxes such as Fuel Taxes or Export Duties, the average tax burden is equivalent to 12% of the companies’ turnover.

  • There is an important tax burden dispersion by activity and location. From a minimum of 7.5% of the total turnover for a meat packing activity carried out by an SME in the city of San Luis, to a maximum of 17.3% for a large hotel in Bariloche.
  • There are also differences in the tax burden depending on whether it is a small or large company and between firms in the same industry: from 25% in hotels to 50% in the meat packing sector.
  • There is double or triple taxation due to the overlapping of taxes, which makes it difficult to know the real cost that the productive sectors face.
  • This study refers to a tax burden baseline and is limited by the lack of information requested from chambers of commerce and municipalities, but which was not provided.


National tax revenue reached AR$612.14 billion in August, which implied a nominal growth of 33.5% year on year (YoY), but a contraction in real terms of 5.2%. This fall was the most moderate since February.

The slowdown in the decline in tax revenue can be explained by the gradual increase in the level of activity due to the partial relaxation of the restrictions imposed in the context of the COVID-19 pandemic. In addition, balances of Income Tax for Individuals and Wealth Tax,
whose original maturity in June was extended to August, were collected. The first advance payment for the year 2020 of the Income Tax for Individuals and Wealth Tax was also collected. PAIS tax reached a collection record, mainly driven by the purchase of foreign currency for hoarding purposes.

The uneven evolution of taxes throughout the year has generated a change in the composition of tax revenue, with a lower weight of the three most important taxes (VAT, Income Tax and Social Security) and an advance of taxes such as Wealth Tax, Co-participated Internal Revenue and PAIS Tax.

Likewise, it is estimated that the resources allocated to the National Administration fell in the first 8 months of the year by 13.6% YoY in real terms, those of Other Non-Financial Public Sector Entities by 16.8% YoY and those of the provinces by 11.5% YoY.

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