Impuesto PAÍS - Oficina de Presupuesto del Congreso

ANALYSIS OF NATIONAL TAX REVENUE – MAY 2021

by Nicolas Perez | Jun 8, 2021 | Tax Revenue

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 – APRIL 2021

by Nicolas Perez | May 7, 2021 | Tax Revenue

In April, national tax revenue totaled AR$817.88 billion, the highest increase since April 2003, with a real increase of 40.8% and a nominal increase of 105.5%.

The nominal exchange rate increase and the low base of comparison for last year -when the economic activity was restricted by the preventive and mandatory social isolation- partly explain this result.

Social Security resources grew in real terms for the first time since September 2020.

The most significant variations above inflation were those of Income Tax (36.4% YoY), VAT (35.7%), Wealth Tax (224.5% YoY) and co-participated taxes (154.4% YoY), in some cases because of regulatory amendments that expanded the tax base.

Tax revenue had a negative real increase since January 2020, a situation that was reversed in September 2020 steadily up to date.

PAIS Tax collection shrank again and accrued USD 2.17 billion since its creation.

ANALYSIS OF NATIONAL TAX REVENUE – December 2020 and yearly total

by Juan Fourcaud | Jan 14, 2021 | Tax Revenue

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.

ANALYSIS OF NATIONAL TAX REVENUE – NOVEMBER 2020

by Juan Fourcaud | Dec 9, 2020 | Tax Revenue

Tax revenue amounted to AR$649 billion in November, a nominal growth of 36.7% YoY, which is explained by the gradual increase in the level of activity, but mainly due to the payment facilities arising from Income Tax and Wealth Tax deadlines that this year took place in August. Revenue from the second income tax collection for transactions subject to PAIS tax also had a positive effect.

The real variation was 0.1% YoY in November, the third registered so far this year, partly due to the modified calendar of tax deadlines, the relaxation of social isolation, and a lower base of comparison with respect to November 2019.

In absolute terms, the taxes that most contributed to the nominal increase in revenue were Income Tax (39%), Value Added Tax (28.6%), Wealth Tax (10.6%) and Social Security resources (12.5%). PAIS Tax decreased its share due to greater restrictions applicable to taxable transactions. For this reason, it contributed only AR$8.5 billion.

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.

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.