The data at a glance indicate that if the Chamber of Deputies approves this week the fiscal package sent by the Government in the original version, with the Itax on profits of the fourth category included, the provinces can benefit from the greater co-shareable collection. But governors are looking at other numbers as well: If you look at the net flow of funds with the Nation, some districts are likely to lose.
The hypothesis is that the Chamber of Deputies manages to insist on the fiscal package in its original version and then the Income tax is restored. From the greatest collection that can be obtained, lThe provinces will be left with 0.3 points of extra GDP for what they are receiving now.
According to the economist Nadín Agañaraz, director of the Argentine Institute of Fiscal Analysis (IARAF), Tierra del Fuego would be the most benefited province and, probably, the City of Buenos Aires the most affected district.
”Given that the Income Tax is a co-participatory tax, approximately 60% of what is collected goes to the provinces and CABA and the remaining 40% goes to the Nation,” says Argañaraz. In that sense, he maintains that “of the 0.5% of GDP with the highest potential collection, 0.3% will go to the Provinces and CABA and 0.2% will go to the Nation”
“For the Nation, this possible 0.2% of GDP of extra annual revenue is equivalent to 5% of the total fiscal effort that requires the elimination of an annual fiscal deficit of around 4.4% of GDP,” says the economist.
The study adds that “What is evident is that the result of the reform is different by province.the amount per inhabitant being the most appropriate for measuring the impact.”
Impact on the provinces
“If you take the extremesthe inhabitants of Tierra del Fuego, Catamarca and Formosa would benefit the most from the distribution of the collection since they would receive an additional $115,000, $110,000 and $103,000 annually,” respectively,” details the economist.
At the other extreme, the inhabitants who would receive the least They would be those of CABA, Buenos Aires and Mendoza, with $13,600, $21,600 and $35,000, respectively. On average, the additional transfer would be $67,500. The provinces of Santiago del Estero and San Juan would have an extra income from co-participation of $67,000 and $71,000, respectively.
In all cases, says Argañaraz “A governor must analyze the comprehensive impact of the tax reform that is in Deputies and that, in addition to Profits, contains new developments in Personal Assets, moratorium and externalization of assets.”
The other calculation: net funds
“If the amount of resources that you have to give to the inhabitants of your province is greater than the resources that they are going to receive for all reasons, this reform is not favorable. In the opposite case, yes it is,” explains the professional.
Considers that “in the case of provinces such as Catamarca and Formosa, the Earnings reform is clearly favorable.”
And it exemplifies that, if we take the case of Catamarca, the provincial government will receive an annual amount per inhabitant of $110,000, a figure that results from the combination of an extra income of $47.5 billion and a population of 429,500 inhabitants. “This amount of money It is much greater than the contribution that the people of Catamarca who have to pay a higher income tax will make. from the reform,” indicates the study.
If the same reasoning is followed, Argañaráz indicates to Ambit that regions like The City of Buenos Aires and Greater Buenos Aires, when analyzing both what they receive and what they pay, “must be net contributors.”
In short, for example, the federal district would be receiving the figure of only $42,526 million pesos per year, which implies about $13,623 per inhabitant. What must be taken into account is that of the amount that the City receives, a large part is generated by the neighbors themselves who pay the TaxTherefore, the district will contribute more than it receives. CABA has a co-participation of 0.007% of the GDP.
Source: Ambito
