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Wednesday, November 30, 2022

Government will insist on advancing with the real estate revaluation this year

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The revaluation is one of the fundamental objectives to which the country committed itself to fulfill in the Extended Facilities agreement, and one of the few chapters where the country can seriously advance in improving its fiscal position. It competes with the reduction of subsidies to public service rates, but it estimates an even higher collection for the year and the next. The revaluation promises revenues of $65,000 million, while the segmentation of about 15,000 million. Those $65,000 million are calculated from the application of the increase in the base values ​​of most homes throughout the country, for taxpayers reached by Personal Assets.

Then, for the following year, the increase in income would double and reach about $130,000 million. It will be due to the effect that the measure would have on this tax, also affected by the increase that would impact the non-taxable minimum and the rise in assets on which the tax falls. But, in addition, the rise in the tribute paid in the provinces and municipalities should also contribute a percentage of the income, directly or indirectly, through the signing of a fiscal pact. According to the numbers that Martín Guzmán had prepared at the time, the revaluation mechanism could be applied without legal problems, since it was not related to an increase in taxes, but rather to changes in the way of determining the taxable object. The Government thus proposed from the beginning to respect its maxim that the agreement with the body led by Kristalina Georgieva does not include any increase in current taxes, or the creation of new ones, but rather it is a correction on the assets where the payment. Subtle difference, but, they affirmed in the Executive before and after Massa’s arrival at the Palace of the Treasury, legally salvageable. The agreement with the financial institution signed last March includes the following paragraph in the chapter where the promises of higher collections as a result of the tax policy appear: “In close coordination with provincial governments, at the end of September we will complete the process of updating revaluations real estate at the federal level (structural reference) so that they come into force as of fiscal year 2022. The net income from co-participation of this initiative could reach 0.1% of GDP for fiscal year 2022 and 0.2% additional GDP over the next few years.

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The final intention is to reach a total contribution of between 0.3 and 0.4% of GDP in reducing the deficit in this way, which would imply an approximate amount of $150,000 million. If we add to the revaluation what would be obtained from the reduction of projected energy subsidies by 0.6% of GDP; In total, the Palacio de Hacienda would reach total savings of more than the $600,000 million deficit; or, measured in another way, a 0.8/0.9% final imbalance for 2022 and 2023. For the IMF technicians, this progress is essential to believe the Executive that the fiscal goal of a deficit of 2 will be met, 5% this year and 1.9% in 2023. The Fund wants an endorsement from the governors, who in general have already committed to increasing real estate pressure by having closed the fiscal pact at the end of 2021. However, there are few those who at this point seriously advanced in the application of the revaluation; and from what is known in the ruling party, many, like Mendoza, Corrientes and Córdoba, directly do not even have it in the folder. There is much less commitment in the Federal Capital.

Source: Ambito

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