He National government increased during March 2023 the sending of funds to the provinces of the co-participation. The figure, according to a private report, was 2% in real termscompared to the same period last year.
Estimates indicate that this is how it recovered from the fall that occurred the previous month in the distribution of resources to the districts.
Co-participation: raise the distribution of funds
The survey was published on Center for Argentine Political Economy (CEPA) in the last hours and showed the real situation of the relationship Government-Provinces in the distribution of funds, in the context of inflation and the pressure of the fiscal deficit.
According to the report, the improvement is tied to an increase in the collection of the Value Added Tax (VAT), which is one of the main co-participating taxes.
“He first month of 2023 reflected a slight increase of the order of 0.1 percent year-over-year in real terms. In February, transfers by co-participation in real terms fell 3.3 percent. In March, transfers grew 2 percent in real terms,” says the CEPA report.
The consultant stated that “VAT exhibited a noticeable increase of 7.4 percent while Profits fell 3.8 percent in real terms”.
“When considering the situation province by province, it is noted that all of them exhibited an increase in their resources of national origin measured in real terms in March 2023,” the report highlighted.
The provinces that received the most and least funds
At the extremes were located Buenos Aires with an increase of 0.2 percent and Río Negro and Santa Cruz with a rise of 4 percent.
“Considering Coparticipation transfers, VAT collection grew 7.4 percent year-on-year in real terms in March 2023. In the first two months of the year, the result was also positive and is related in all three cases to the increase in activity and consumption in these months”, remarked the report.
Instead, in the case of Income Tax, which is the other co-participating tax, March shows a year-on-year drop adjusted for inflation of 3.8 percent.
“The negative performance that began in January (-0.8 percent) in the collection of this tax continues,” the report detailed. Prior to 2023, the real growth trend was 24 months old with the exceptions of June and October 2021.
The CEPA pointed out that “the advances in the payment of this tax, as well as some regulatory modifications have probably had to do with the drop in its collection this month.”
Source: Ambito
