If the Government’s economic team intends that the new stage of the economic program is successful, the key will be to be able to sustain the fiscal surplus. And that, according to what the tax collection numbers of June will not be easy.
It is estimated that the tax collection of the Sixth month will be in negative territory againas it has been doing throughout 2024, with the exception of last month.
Two of the fundamental taxes of the Argentine fiscal structure plummeted by 20% in real terms. An important part of this is due to the decline in activity.
Three consultants: the Argentine Center for Political Economy, Politikon Chaco and the Argentine Institute for Fiscal Analysis (IARAF) indicate that last month’s incomeVAT plummeted by 20% in real terms, while those of the Tax on Profits 18%. These are all figures that also indicate that the first fiscal deficit of the year would have occurred in the month that just ended.
“While VAT collection fell 20.6% in real terms, Earnings fell by 18%. Thus, the downward trend that had been exceptionally interrupted in May is resumed,” says the CEPA.
For its part, Politician Chaco indicates “the tax ons Earnings, presented a year-on-year decline of 17.8% in real terms; and the Value Added Tax (VAT) again showed a very considerable decline, being in this month of 20.3%”.
Meanwhile, the IARAF It says that “interannual, June Income Tax collection fell 18.2% real year-on-year and VAT collection fell 20.7% real year-on-year.” On the whole, VAT and Profits collection in June would have recorded a real year-on-year drop of 19.5%,” details the entity.
Taxes: What are the other taxes that affected the collection?
Other taxes that also impact federal co-participation, although to a lesser extent, also showed declines. As measured by Politikon Chaco, Internal Taxes fell 32.2% and Other Co-Participated Taxes, 14.5%. Added to this are other components of co-participation derived from the tax on Personal Assets, which fell 60.1%; Social Security VAT, 20.3% and Monotributo, with 49.3%.
The data show, on the one hand, that the positive result ofl National Public Sector (SPN) of May, with a financial surplus of $1.18 billion, was due to the extraordinary collection of Income Tax.
The CEPA indicates that “in the case of Income Tax, June shows an interannual drop adjusted for inflation of 18%.”
“Sand thus leaves behind the exceptionality of May, with a growth of 83%, explained by the December devaluation, which implied significant capital gains for companies with dollarized assets,” explains the study center.
The consultant adds that “since in May the companies paid the balances of the sworn statements, it was a month of high tax collection.” “In June, the decreasing trend observed in previous months resumed,” the entity concludes.
The fall in consumption affected VAT collection
The other aspect that is visible is the collapse in VAT collection, which reflects the fall in consumption a month late. The revenues that will be showing in June were generated with the billing of May. And that shows that the worst of the crisis has not yet reached its lowest point. Consumption data, such as that of the Argentine Chamber of Commerce (CAC) for May, showed a 7.7% year-on-year drop.
“The last four months showed a collapse (in VAT) explained by the sharp drop in economic activity and consumption. This could be associated with the fact that the increase in customs VAT fails to compensate for the collapse of internal VAT. In 2023, all months had shown increases in real terms, while this year collection fell in four of the six months,” the report indicates.
Source: Ambito
