OFICINA DE PRESUPUESTO DEL CONGRESO - Oficina de Presupuesto del Congreso

BUDGET EXECUTION OF GENDER – RESPONSIVE ACTIVITIES

by Juan Fourcaud | Dec 1, 2020 | Gender

This report analyzes the execution, as of November 13, of the budgetary activities labeled by the Executive Branch for their connection to gender equality.

As of November 2020, the National Budget includes thirty-five (35) budgetary activities with a gender perspective. These activities accrued an expenditure of AR$832.2 billion as of November 13, 2020, which accounted for 14.6% of the total expenditure of the National Government.

Income policies (direct monetary transfers) amounted to approximately 99% of Gender-Responsive Budget (GRB) and ANSES, the agency in charge of managing and administering these policies, practically concentrated the entire GBR spending. The purpose of this social policy is to achieve financial independence for female beneficiaries.

The level of physical execution of monetary transfers is very uneven. Some activities exceed 99% and others are barely above 26% of the annual schedule.
There are new activities labeled in the 2021 Budget for the promotion of income.
The budget for actions against gender-based violence was nominally doubled in relation to the extended 2019 appropriation, but the average level of execution is 46%.
As of the third quarter of 2020, 124,468 victims of gender violence were assisted through the 144 hotlines.
Out of the 55,000 doses for hormone treatments projected under the Gender Identity Law, 32,703 were distributed.

TAX BURDEN ON PRODUCTIVE ACTIVITY – METHODOLOGY

by Juan Fourcaud | Nov 26, 2020 | Tax Policy and Fiscal Federalism

The OPC is developing a project to analyze the tax burden on a set of economic activities at national, provincial, and municipal levels in Argentina, a research that covers 30 cities in 23 provinces and the Autonomous City of Buenos Aires.

This work is a methodological approach, which includes a mapping of provincial taxes and their capacity to provide public funds.
The overview of the main taxes, their legal basis and their collection impact aims to determine, among other things, the true magnitude of tax burden, tax burden on employment and the amount of resources generated by each tax.

Due to difficulties in establishing benchmarks and making comparative measurements, the focus will be on measuring the “theoretical tax burden”, according to the place where each activity is carried out. The assumption will be that each activity is carried out only in one place of residence and is taxed in only one jurisdiction.

In summary, this study, focused on 30 cities and on 5 sectors of activity, has revealed the existence of more than 150 taxes on economic activity in Argentina with places that accumulate between the three levels of government from 21 to 40 different taxes, which gives clear indications of the difficulty faced by any economic agent in complying with them.

The complex universe of the provincial tax system makes it difficult to have a solid basis for comparison and its performance is different per jurisdiction: unlike 2018, where some provinces took advantage of the opportunity to increase their tax rates up to the limit allowed by law, in 2019 there is a declining trend.

The permanent modifications in rates and fees diminish the legality and transparency of the system.

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.

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.