Thanks to the payment of Income Tax of companies, whose product reflects the profit generated by the devaluation in relation to dollarized assets, in May the Minister of Economy, Luis Caputomanaged to consolidate the financial surplus, in addition to sending to the provinces resources for $5 billion, in the middle of the debate on the Bases law in the Senate.
This is highlighted in a report by the Argentine Institute of Fiscal Analysis (IARAF). “In the month of May 2024, The National Government sent the consolidated provinces, plus CABA, $5.03 billion as co-participation, special laws and compensations,” IARAF reported. In this way, it became “the largest shipment in real terms in the history of co-participation and the first month of the year with real year-on-year increase (+22.4%)”. the report explained.
The work highlighted that one of the main reasons for this record It is due to the “very significant devaluation of the peso in December 2023.”
“Companies with dollarized assets recorded significant capital gainswhich implied that they pay much more Income Tax”, indicated the job.
The report also noted that in May “the companies that closed their balance sheet in December 2023 paid the balances of the sworn statements, and in that month the companies that explain approximately 66% of corporate tax collection.”
The study maintained that “co-participation May record implies extra resources for the provinces and CABA for $1.7 billion.”
“Taking into account the poor performance that automatic transfers to provinces and CABA had been having until April (-19% real year-on-year), “It is interesting to evaluate the extra resources that the provinces would obtain in May,” explained the IARAF.
He highlighted that in the same In the month of 2023, these shipments were 15.6% higher than the real monthly average of the first 4 months of the year.
With this, it is possible to obtain a measure of the extra money that the provinces added in May compared to the performance they would have had if May behaved as in 2023.
“Following this line, the consolidated provinces and CABA would have obtained a surplus of $1.7 billion in May” in constant May currency.
The IARAF indicated that The improvement in co-participation “is mainly explained by the very good performance in the collection of Income Tax (80.4% real year-on-year), which manages to overcome the drop in VAT collection (-19.3% real year-on-year) “.
On the whole, “The collection of VAT and Profits would have registered a real year-on-year increase of 28%.”
In relation to April, the collection of Profits would have had a significant real increase of 316%and the collection of VAT would have fallen by a real 9.4%.
The joint collection of VAT and Profits (which represents 54% of the total national collection) would have increased by 90.2% in real terms.
Source: Ambito
