Tax collection reached $13,379,446 million in May, a year-on-year variation of 320.9%, which was above the 280% inflation expected for that period. That way, Tax revenues rose 10% year-on-year in real terms If the effect of inflation is discounted, they showed the first recovery after several consecutive months of decline due to the collapse of activity.
“After 8 consecutive months of real year-on-year decline, in the month of May 2024 national tax collection would have increased by 10% in real year-on-year. The collection that would have increased the most in real terms would be the PAIS tax with 251.4%, followed by Profits with 80% and in third place the export rights with 11%”, estimated Nadin Argañaraz, head of the IARAF.
According to the AFIP, net VAT collected $3,097,296 million, an interannual variation of 204.2% nominal. Tax VAT, which measures mass consumption, increased 220.7%, affected by the increase in the calculation of VAT Refunds to Exporters and the Grain Marketing Regime in reference to the previous year, while Customs VAT increased by 189, 1% in May, the month in which products in the basic basket were exempt from VAT collection.
One of the main drivers of collection was the Income Tax with a jump of 585.8%, by raising $5,511,952 million. “This result is linked to the expiration of the balance of the Sworn Declaration for the 2023 fiscal period of the Companies with the end of December, which is the most important of the year, and was characterized by the good performance of the Financial Activity,” the AFIP reported.
In this way, according to the IARAF, Profits would have increased by 80% year-on-year in real terms, the highest collection in the last 27 years. “The main reason for this record is due to the fact that, with such a significant devaluation of the peso in December 2023, companies with dollarized assets registered significant capital gains, which implied that they paid much more income tax,” explained Argañaraz.
The one with the greatest growth was the COUNTRY Taxwhich raised $563.1 billion and grew 1,239.3% due to the expansion of its tax base with the income from the payment applied to foreign currency purchase operations for the payment of imports through the BOPREAL bonus. “All the bond placements, plus the expansion of the import base and the increase in rates, explain such a significant increase,” said the IARAF.
The third pillar of income was Export rights, with which $751,208 million were obtained, an interannual variation of 323.4%. In real terms, it would have been an increase of 11% amid the fall in grain prices and the exchange rate appreciation. “Export duties began to make their weight felt, combining physical and exchange rate factors,” said Argañaraz.
The rest of the taxes, including, as already mentioned, VAT, grew below inflation. In Import Duties and others, $270,320 million were obtained and a variation of 189.9%. The Tax on Debits and Credits reached $638,994 million, with a year-on-year increase of 187%. And Social Security income increased 234.8%, reaching $2,209,300 million, which reflects the still lag in salaries.
In Personal Assets, $24,671 million were reached with a decrease of 16.4%. “At the other extreme, the collection that would have fallen the most would be the Personal Assets tax, which would have decreased by 78.1% in real terms year-on-year, followed by co-participating Internal Affairs with 37.5% and check tax with 24.7%. .The main tax, VAT, would have registered a year-on-year drop of 22%, reflecting the significant drop in consumption“said Argañaraz.
In this framework, according to the specialist, the increase in collection in Mayo significantly reduced resource loss that the national non-financial public sector accumulated in the first four months of the year. “From losing $2 billion at the end of April, we went on to lose $1.6 billion at the end of May,” he said, and assured that “this relative cut in income changes the dynamics of the first 4 monthsin which public spending contributed to cutting the deficit.
