During an event in The Rural which took place this Sunday, Javier Milei promised to lower the COUNTRY TAXalready remove withholding taxes from the field in the coming months. However, these measures will have a strong impact on tax collection and the Executive must still wait to compensate for this through the measures approved in the tax package, such as changes in Income Tax and money laundering.
Firstly, as the President explained, in September the percentage of the COUNTRY TAX from 17.5% to 7.5%Although this tax is stipulated by law to continue until December 2024, he also said that after that period it will be eliminated and the president confirmed this path.
According to data from the Federal Public Revenue Administration (AFIP), $780,042 million were collected through the PAÍS tax in June, which means an interannual variation of 1321.8%. Likewise, in the first six months of the yearthe goals were reached $3,593,407.3.
“It is favorably influenced by the expansion of the tax base of the same with the income from the payment applied to the foreign currency purchase operations for the payment of certain imports,” the agency explained.
In this regard, they pointed out that this occurred to a greater extent “due to the rise in the exchange rate, and the increase in rates starting this year, both for payments on account and for imports of goods and freight.”
What will happen with withholdings?
On the other hand, Milei also spoke about the removal of taxes on the countryside: “We remained stoic in the face of pressure and they remain in the hands of the Executive. They are going to be eliminated and that is my commitment.”
This decision will also have a strong impact on the treasury. According to the figures published by the AFIP, only 100 million euros were collected in June $429,614 million, which showed an interannual variation of 136.9%, while so far this year they were obtained $2,735,087.1.
In this case, not only the exchange rate risebut an important point was the decrease in the average prices of most products in the soybean and cereal complexes compared to the previous year.
One by one, all the measures for the countryside that Milei announced
These are the main points of the path that Milei promised to follow in the next stage of his mandate:
- Elimination of the Export rights (DEX) to cows in categories A, B, C, D and E.
- Elimination of 25% of Export Duties (DEX)X to animal protein. “It affects the sector across the board,” he explained.
- Elimination of re-registration in the Single Registry of Operators of the Agroindustrial Chain (RUCA).
- Indefinitely extend the elimination of Export Duties (DEX) to the dairy sector.
- Accelerated amortization regime for capital goods in the agricultural sector.
- Modification of the accounting management of livestock.That profits be paid on sales and not on fattening“Milei said in his speech.
- Irrigation regime with benefits for marginal areas.
- Salary amortization scheme for bulls with genetic value. “In order to encourage innovation and investment,” he added.
What is the impact of the elimination of the PAIS Tax and withholdings?
However, these steps are not free. They can have consequences for management, which must be contained elsewhere. Firstly, the elimination of the PAIS tax As previously mentioned, it has a revenue impact. The Government will have to offset this income with other income that could well be money laundering, at a time when reserves are seasonally complex to accumulate.
The other effect, The best known is about buying currencies by purchases with credit or debit cards abroad (tourist dollar) or the purchase of tickets abroad or tourist packages to international destinations. This will cause the dollar card that today is above $1,500, goes down up to slightly above $1,000, since the PAIS Tax represents 30% of the current value.
Meanwhile, the Subscription to streaming services or other digital services provided by companies based abroad They are taxed with 8% of the PAIS tax, which would also reduce the value, placing the exchange rate at around $1,300.
He last impact is on inflation. The Government is betting that the reduction of the PAIS tax, which will begin to occur in September, will help to reduce the price increase because most industries will import at a cheaper exchange rate. This may be a risk if the difference between this exchange rate and the CCL dollar or the MEP is greater. widening the exchange rate gap and therefore, it is more complex to accumulate reserves.
Finally, as regards the withholdingsThe benefit for the countryside is that it will lower costs, favouring production, if this “surplus” of profit is used for reinvestment. The downside is that the Government will also lose revenue from Export Duties (DEX), something that it will have to compensate for either with a surplus or with spending cuts.
Source: Ambito
