The Minister of Economy, Sergio Massa, announced that he will incorporate an addendum to the presentation of the 2024 Budget, with a co-participation mechanism “to take care of the accounts of the provinces.” But how much money does it represent? Is it enough to compensate for the loss due to Income Tax?
The COUNTRY taxes Already, current account debits and credits collected $2.2 trillion between January and August of this year, which represents 9.5% of tax revenue, according to data reported by the Ministry of Economy and the Federal Public Revenue Administration (AFIP).
The Minister of Economy, Sergio Massaannounced that he will promote a reform so that part of the proceeds from these two taxes are co-participated with the provinces, as compensation for loss that will suffer from the non-impossible minimum reduction in the Income tax.
According to private studies, the governors some will give in for the reform $500,000 million, that they could recover through the route proposed by Massa.
The tax on debits and credits – better known as the check tax – was created by the former Minister of Economy, Sunday Cavallo, in 2001 in one of his many attempts to save convertibility.
It was presented as a “transitional” tax which finally became permanent and its collection fluctuates in part to the rhythm of economic activity.
Check tax and PAIS: how much income they represent
From January to August check tax collected $1,666 million with a year-on-year increase of 114.8%, in line with inflation. This result was possible because in August it increased 138.2% to $277,762 million.
This sharp jump is explained by the rise in post-devaluation prices that boosted monthly inflation to 12.4%.
Meanwhile, the COUNTRY tax It raised $211,902 million in August, six times what it had contributed in the same month last year.
Last month, the extension of this tax on imports of certain items had a full impact.
In this way, the PAIS tax added $530,787 million in eight months, with an increase of 155.4% compared to the same period last year. Of the accumulated amount, 40% was collected in August alone.
Massa’s proposal would be included when the addendums to the budget which was presented on September 15 but will be discussed after the elections.
“The governors have proposed to me and we are going to incorporate as an addendum to the budget presentation, a mechanism for sharing part of the check tax and part of the country tax to take care of the accounts of the provinces and I also want to assume that commitment here,” Massa said after a meeting with leaders from the North of the country.
The initiative proposes share 25% of the collection of the tax on the check and the 35% of the collection of the COUNTRY Tax. With current numbers they would be about $400,000 million and $160 billionrespectively.
Source: Ambito
