With an automobile market with falling prices 0km sales due to the price increase registered after the December devaluation, The Government defines the changes in the “luxury” tax that have been delayed since the beginning of the month.
The idea is that the decree will be known next week, with retroactive effect to January 1, and automotive companies can begin to invoice units to their dealer network with the new values of the vehicles.
The expectation for the modification of this tax regime also deepened the slowdown in operations due to speculation of a change in prices.
Just as you anticipated Ambit, Javier Milei’s economic team is preparing a decree to mitigate the impact of Internal Taxes that today affects most models.
This was due to increases of between 40% and 60% in car prices in December.
Currently, all 0km of more than $14,700,000 must pay a tax of 20%, which implies an increase in the values of 25% for this scale due to the method of calculation, while the second scale pays 35% and increases by 50 % in the final value of the cars.
In principle, officials from the Ministry of Economy had been working on the suspension of the first stop. This is how it was communicated to companies in the sector.
However, in the last few hours that position has changed and the one that has the most weight is to advance to January the adjustment of the tax base that must be made at the beginning of March.
“We don’t know how it will turn out because we receive information about changes all the time. What we know is that some modification is going to be made,” they explained to Ámbito from a terminal.
In this way, the limit from which this tax would begin to be paid practically, in the most extreme case, would double.
The mechanism currently works by quarterly adjustment based on the inflation accumulated in a previous quarter, according to the 0km wholesale price index.
For example, starting in December the base was adjusted by 41% for the period July, August and September. Due to the way it was applied, the update was made in December, which implied that the adjustment was made 5 months late, in relation to July inflation.
This form caused the 0km to be “capped” below the taxable amount which, until today, is $14,700,000 to the public.
The next change, according to the current system, should be applied from March, based on the accumulated inflation of October, November and December.
The proposal that has the most consensus now in the Government is to carry out this update from January 1, so that automotive companies can bill 0km with the new scheme.
The current tax base is on 0km values (before VAT and dealership commission margin) of $10,364,800. The cumulative increase in wholesale car prices, according to the IPIM, in that quarter is 91.2%. In each month, this index was 2.5% in October, 13.5% in November and 64.5% in December.
This would imply that the new base that would govern in January would go to $19,817,000, which would mean a public value of approximately $28,200,000. This value changes slightly depending on the way the tax is allocated and the margin of each carmaker.
That is to say, those 0km below that amount would stop paying the first scale of the “luxury” tax starting this month.
In the case of the second scale, it would go from the current approximately $32,000,000 to around $61,000,000.
There is also the possibility that the adjustment is made for the cost of living index and the increase in the tax base would be smaller, although this remains to be defined.
From both the Government and the automotive companies, the decree would come out next week, although with the delay that has been recorded it is difficult to guarantee.
Source: Ambito
