Within the framework of his first management report in Congress, the Chief of Staff, Nicolas Posse, answered 1,286 questions from the blocks in the Senate, in which he spoke about some key topics, although not with great precision. Among these he spoke about the dollarand particularly the dollarization plan, the PAIS tax, inflation, and the rental law.
On dollarization, Posse ruled it out: “It is not on the economic agenda, but free currency competition is in place as the final phase for the process that began in December with the cleanup of the Central Bank’s balance sheet.”
“The Central Bank of the Argentine Republic will continue on its path towards a regime of currency competition, calibrating the policy interest rate within the framework of the current process of normalization of monetary policy, seeking to reduce its remunerated liabilities, improve its balance sheet of balance and maintain its exchange rate policy with the current characteristics to favor the process of accumulation of international reserves and drastically reduce the inflation rate. In this sense, a change in the monthly variation rate of the official exchange rate is not expected. that remains of the year 2024,” says the response.
Also linked to dollar, referred to the future of COUNTRY taxwhich confirmed that its destiny is disappearance, although it has not yet been decided when.
“In this sense, the Government knows that the provinces need to recompose their numbers so that the Income Tax is a tax that the provinces need to achieve that objective,” says Posse and adds: “It is also noted that there are taxes that do not “They are subject to co-participation like the Debit tax (check) or the PAIS tax because in the future they will have to be eliminated.”
Later, he responds to the legislators who asked the official specifically about the elimination of the PAIS tax, as well as those applied to checks.
In the document sent to the Upper House, Posse responded: “The Ministry of Economy reports that, although there are powers delegated to the National Executive Branch, they do not contemplate those linked to the repeal of both taxes. Furthermore, it is reported that “There is currently no project that implies a reduction or suspension of taxes.”
This tax was one of those increased by the Government of Javier Milei days after his inauguration. It was the Minister of Economy, Luis Caputo, who decided to take it from 7.5% to 17.5%. There are several sectors that demonstrated against the continuity of the PAIS tax and they range from agriculture to industrial sectors because they maintain that the incidence of the tax on imported inputs affects competitiveness, especially of those items with export outlets since it makes them more expensive. against competitors abroad.
About what will happen to the economic activity, the Government responded that it will depend on the sanction of the Bases Law and the fiscal program in Congress. “If the recovery is high speed, usually typified with a ‘V’; or a slower process, usually classified as ‘U’, will depend on the positive sanction of the package of laws,” they stated.
Likewise, after yesterday the inflation reach single digits – it was 8.8% in April according to INDEC – it will continue along that path. Economists agree and believe that it will be around 5% until the end of the year.
A no minor issue is rents.. Since the previous law was repealed, supply has increased and prices have moderated, improving the market situation after a year in which prices skyrocketed and units were scarce. Faithful to the spirit of the free market, the Government confirms that it will not send any new projects.
Source: Ambito
