The important modification will apply only to the workers reached, who today are just under one million, which is equivalent to 11% of employees in a dependency relationship.
According to data from the AFIP, 40% of Profit collection corresponds to fourth category taxpayers and another 50% to companies and societies. However, according to the same organization, Large companies pay an average of only 2.45% for the same tax. At the same time, in terms of exemptions, broken rates, exemptions and sectors that do not pay taxes, the State loses 4.6% of GDP.
The proposal was taken up by the vice president Cristina Fernández de Kirchner in April and then in June by the head of the AFIP, Carlos Castagneto, in a conversation in La Plata. There, he asked for a comprehensive tax reform and even said that when he demanded the 15% advance payment on the Income Tax, the Argentine Industrial Union warned him that it would prosecute the measure. “Where is the dignity of great businessmen?”asked.
For the Public Accountant and Master in Political Economy, Magdalena Ruainitiatives that promote progressive taxes or reforms in inspection mechanisms “they encounter strong resistance from the most concentrated sectors of the economy.” Likewise, he maintains that the main argument that rejects a progressive reform is the country’s supposedly high tax pressure. However, he maintains that it is in accordance with international parameters. According to OECD data, in 2020, our country’s tax pressure (tax collection as a percentage of GDP) was 29.4%, being below the OECD average of 33.5%, and below of that of Brazil, equivalent to 31.6%.
Furthermore, according to Rua, “for large transnationalized Argentine economic groups and multinational companies whose controllers are located abroad, the tax pressure is not usually the same as for the rest of society, since they manage to minimize their tax burden through “abusive tax planning maneuvers and transferring their capital abroad.”
In this sense, the report “State of Tax Justice 2021”prepared by a group of organizations, estimates a loss of annual tax collection for Argentina of close to US$1.3 billion annually due to “corporate tax abuse and tax evasion of financial wealth placed in tax hideouts.”
But evasion is not the only key to the poor nutrition of the treasury, but also avoidance. Adrian Falcosecretary of the Tax Justice Network of Latin America and the Caribbean, tells in amphibian that there are items that specifically enjoy tax benefits, for which “they do not have to carry out overlapping operations or devise fraudulent schemes.” This is the case of mining activity, according to Law No. 24196, or forestry activity, under Law No. 25080. Both provide incentives for Profits, among other taxes. Thus, it defines a “win-win” scheme for large companies: whether through exemptions or fraudulent maneuvers, they always reduce their share of taxes.
At the same time, the Argentine tax system is presented as highly regressive, because most of the collection is explained by consumption taxes, which weigh mostly on the most vulnerable sector. Falco clarifies it this way: “On average, for every $100 that the treasury collects in taxes, $31 comes from Profits and $41 corresponds to VAT, the tax that we all pay.”
Under this panorama, some fundamental aspects appear to rethink the tax structure. For CELAG, for example, the tax system “could collect more and with more fiscal justification without needing to apply more taxes.” It would be enough, on the one hand, to simplify and reorder the tax matrix (which has 85 taxes at the municipal level, 39 provincial and 41 national) and, on the other, improve the wording of the legal basis of each tax, “in such a way that abusive use of tax advantages is not allowed, without economic or social reason.””. They also focus on a surcharge on the tax on banks’ extraordinary profits, since the Argentine banking sector “It is the most profitable in Latin America” and a minimum tax on multinationals.
In turn, Rúa not only proposes increasing the progressivity of Personal Earnings and Assets, but also recovering the minimum presumed income tax, intended to tax the assets of companies and owners of rural real estate, and the inheritance tax, and adopt the economic group criterion, instead of the arm’s length or separate entity criterion that currently allows related entities of multinational companies to be considered separate entities.
Finally, for the taxpayer Fernanda Laiun, the calculation of 2.45% “is at least controversial”, because in real terms “the rate is still between 30 and 35%”. But it does highlight the need for a tax reform that solves “the first mechanism of abuse, which is outright evasion, the entire unregistered or informal black economy, which has a very significant weight and is the main cause of the pressure on those who pay is so high and even disorderly.”
Source: Ambito
