The discussion between the government and the governors for each peso available in the economy will mark the economic agenda for Javier Milei’s first year in office. By case, In the first month of the year the drop in co-participation would have reached 12% according to estimates by economist Nadin Argañaráz.
In January, each inhabitant of Argentina would have lost about $6,000 due to lower shipments from the Government to the governors, with whom it remains engaged in a strong dispute over the resources of the PAIS tax.
Private data anticipates a negative result from the first tax collection of the year. 86% of the co-participation moves in step with the collection of VAT and Income Tax. The first would have been hit by the fall in consumption, the second by the 2023 reform that affects from January 1st.
According to the data from the Argentine Institute of Fiscal Analysis (IARAF)directed by Argañaraz, “automatic national transfers to provinces and the Autonomous City of Buenos Aires, with data as of the 29th, would fall 12% real year-on-year in January,”
“The jurisdictions The most affected would be Buenos Aires (-14.6%), Salta (-12.4%) and Misiones (-12.2%). On the other hand, the jurisdictions with the smallest drop would be CABA (-9.7%), La Pampa (-10.9%) and San Luis (-11%),” the report indicates.
The IARAF states that “By discounting the transfers due to special laws and compensation, the net participation of the consolidated would decrease 9.6% in real terms compared to the same period last year (this variation is equivalent for the 24 jurisdictions).”
The study states that “it is possible to quantify the loss of participation in January, treating it in January 2024 pesos.”
The districts that received the least money
“The monthly drop in income of the provinces plus CABA of the month of January, with the information available as of the 29th, at today’s prices, It would be $277,000 million. In per capita terms, they would be about $6,000 per inhabitant country average,” the report states.
The reduction in resources for the provinces occurs within the framework of a strong dispute that the national government maintains with the governors of the provinces who demand compensation due to the loss of resources caused by the reform of the Income Tax.
As of January 1st, the new I began to governCedular tax that affects less than 1% of employees of high purchasing power in the country. This implied a sharp drop in funds that automatically reached each jurisdiction.
Since the first day of this year, Every company and public organization that made withholdings from salaries above $1.8 million gross stopped doing so., generating a new gap in the general collection. Would bel 0.4% of GDP according to government data.
One of the fights that the governors have over compensation for the funds they lost for allowing the collection of Profits to be reduced is over the proceeds of the COUNTRY Tax. Last year it raised $1.5 billion. This year, by extending to more activities than last year, it is likely to raise more, although lower economic activity may offset that effect.
Source: Ambito
