In that sense, the government said that the disbursements will support “Our firm commitment to comply with our obligations before the IMF as the expiration dates arrive and they manage to strengthen our international reserves.”
The deadline for all the instances that Congress and the IMF board must still give to take the agreement for granted is March 22, the day on which the state must comply with the payment of US$2.8 billion. The SDR schedule will be as follows:
- 1st SDR: $7 billion
- After 1st Review: 3 billion
- 2nd review: 3 billion
- 3rd review: 4.5 billion
- 5th review: 3 billion
- 6th revision: 2500 million
- 8th revision: 800 million
- 9th revision: 800 million
- 10th revision: 814 million.
What is expected for the coming months
March
The Federal Administration of Public Revenues (AFIP) will prepare a report containing policies to deal with “high levels of noncompliance.” The IMF seeks that the AFIP improve its collection rates to accumulate 0.3% more on the GDP.
Budget: The government will modify the Budget Law to adapt it to the 2022 fiscal goal, which will be 2.5% of GDP.
Another point that the Executive will have in view are the negotiations with the Paris Club. The Government stated that “negotiations are being carried out with the Paris Club to reach an agreement for a payment schedule for obligations of around USD 760 million to be settled in 2022, according to official estimates set forth in the agreed “Technical Memorandum of Understanding”. with the body led by Kristalina Georgieva.
Government projections point to paying four installments of USD 190 million; the first at the end of March of this year, the second at the end of June, the third averaging September and the fourth towards the end of the year, close to the holidays. In any case, this is not the result of the restructuring with the Paris Club because it is not closed yet and the negotiations will continue in the coming days.
April
The central issue will be the rates. The Government will call public hearings to “discuss a proposal to adjust the wholesale energy rates” as of June 1, 2022. As already anticipated, the increases will be adjusted to the coefficient of variation of wages.
May
Sent a bill to modify the Penal Code
The Executive Power must send a project to amend and “adjust to international standards” taking into account the opinion of experts and technical staff of the IMF, the current legislation regarding money laundering and financing of terrorism. June
End of energy subsidies for 10% of the population. As announced, $10% of the population will pay all of their gas and electricity bills.
This same month, the end of the double compensation for dismissal without cause is also planned, where the government has already anticipated that it will not be extended since the measure was taken to contain the labor market in the midst of the coronavirus pandemic.
Also before the middle of the year, the Treasury must present an action plan in consultation with the Fund’s technical staff, to “improve the finances and the Budget report.”
At the same time, “a plan with certain deadlines to streamline the legal reserve system” and improve the transmission of monetary policy should be published.
June
Modification of the regulations on priorities for public investment. The government will have to modify a resolution of the Chief of Cabinet on the criteria to include investment projects in the national plan. Projects “in progress and among the largest, those with pre-feasibility and feasibility studies” will be prioritized.
At the same time, investors will be sought to return to the capital market gradually in 2025 and the aim is to increase direct foreign investment.
July
Bi-annual presentation on investor relations. A presentation will be published to boost the relationship program, which includes an expansion of the existing “market makers”.
August
It will be tax month. It will seek to reduce the tax gap to align it with countries in the region around 20%. In this framework, the agreement maintains in its schedule that it aims to develop a plan to identify these gaps and improve “compliance with the main internal taxes and customs duties.” This should move forward by August.
The focus will also be on VAT and personal property. An elaborated action plan must be presented and subject to deadlines to detect breaches of non-compliance.
September
The real estate tax revaluation should be ready by September. The updating process will be carried out in collaboration with the provincial governments so that it can come into force for fiscal year 2022. The anti-money laundering and anti-corruption strategy should also be published at that time. The conclusions of the process of updating property appraisals will be presented, which includes some 597,000 throughout the country.
This month, the National Strategy for Money Laundering and Terrorist Financing will be developed to mitigate risks, vulnerabilities and threats.
The agreement also provides for this date the publication of a medium-term plan to reduce energy subsidies with goals for cost recovery rates and efficiency improvement.
December
The analysis of social programs will arrive in December of this year. By then, also with organizations such as the World Bank and the IDB, a comprehensive evaluation should be carried out to identify options for improvement in social policies.
The analysis of the pension system that Martín Guzmán anticipated has to be ready by December. It will seek to “strengthen equity and long-term sustainability of the pension system,” according to the memorandum. The focus will be the special pension regime and mechanisms will be studied to “prolong working life voluntarily.”
December will also be the month in which a plan to relax exchange controls consulted by the IMF and the strategy to strengthen the financial situation by the Central Bank will be presented.
Also planned: the presentation to Congress of the Foreign Exchange Penal Law, the medium-term debt management strategy, external audit on COVID spending (SDRs sent by the agency to finance coronavirus expenses) and the removal of taxes on transactions financial.
Source: Ambito
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