In this way, from the entity that brings together industrial entrepreneurs from Argentina, they demanded that the agreement signed in the 2017 consensus, during the government of Mauricio Macri, where it was indicated that there would be a progressive reduction in gross income.
“It is important to note that gross income is one of the most regressive and distorting taxes in the current Argentine tax system,” they remarked from the entity chaired by Daniel Funes de Rioja, through the statement published today.
Rejection of inheritance tax
Another point of the UIA statement highlights the disagreement with the possibility that the Government apply, as of 2022, an inheritance tax. “This also has an adverse effect on the productive sector, by affecting the transfer of company shares, which especially affects small and medium-sized family businesses,” they indicated.
The justification for the rejection of a possible collection of the inheritance tax from the provinces is that “it would generate a double taxation in our country with the tax on personal property ”since“ the countries of the world that tax the inheritance of property do not have a tax on personal property, and vice versa ”.
Therefore, for the leaders of the UIA, “equity is taxed annually or at the time of transfer, but not at both times, because this generates double taxation on the same tax base, “they highlighted through the statement today.
The full UIA statement
The 2022 Fiscal Consensus, which the National Executive Power will submit to the governors for consideration this afternoon, generates enormous concern in the industrial sector because it increases the tax pressure on the productive sector by eliminating the progressive reduction in gross income originally established in the year 2017.
Specifically in the industrial sector, which should be exempt from the tax in 2022 according to the original agreement signed in 2017, it maintains an aliquot cap of 1.5%. It should be noted that several provinces even increased their aliquots in recent years, taking advantage of the fact that they were below the maximum allowed.
It is important to note that gross income is one of the most regressive and distorting taxes in the current Argentine tax system.
Like VAT, its regressive nature is due to the fact that not only does it harm the competitiveness of companies but its cost is borne by all consumers, having a greater impact on the most vulnerable sectors that spend most of their income on consumption .
For its part, its application in cascade makes it distortive, since it is incorporated as a cost and therefore is transferred to prices. In other words, the tax on gross income is levied several times on the same added value – due to the non-existence of the tax credit computation – and is taken as the cost of production, pressing on prices.
Added to all this is a very high administrative cost because it is the tax with the largest number of collection regimes in the country and with heterogeneity of characteristics in the different jurisdictions. The existence of various tax collection regimes on gross income, furthermore, makes the effective rate faced by each company greater than that imposed on its activity, causing balances in favor of difficult recovery, which lose value over time. product of inflation (since they are not updated).
The gross income tax has a particularly negative impact on Argentine exports, due to the incremental cost it generates in local production. In tradable sectors, such as the industrial sector, the reduction of the tax on gross income is very relevant for competition with foreign products, both when exporting and to compete against imports in the domestic market.
Another aspect of concern of the new Fiscal Consensus is that it states that the provinces will seek to establish an inheritance tax throughout 2022. This also has an adverse effect on the productive sector, by affecting the transfer of company shares, which impacts especially in small and medium-sized family businesses.
In addition, this type of tax would generate double taxation in our country with the personal property tax. The countries of the world that tax the inheritance of property do not have a personal property tax, and vice versa. That is, equity is taxed annually or at the time of transfer, but not both times, because this generates double taxation on the same tax base.
Argentina needs to generate more exports, promote investment and the generation of formal employment. In this regard, the president of the UIA, Daniel Funes de Rioja stated: “the content and implications of this Fiscal Consensus 2022 goes in the opposite direction of the measures that are needed to promote economic reactivation and productive investment.” He also pointed out that this agreement of the Nation and governors of the entire political spectrum should go in the direction of avoiding increases in the tax pressure on the tradable sector, instead of promoting a distorting tax that has numerous negative impacts already known for the economy.
UNIÓN INDUSTRIAL ARGENTINA
December 27, 2021
Source From: Ambito
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