Income tax collection fell by 0.2 pp of GDP (although it showed an increase of almost 8 pp in real terms), partially influenced by the increase in deductions on dependent workers in the second half of the year .
In the case of Personal Assets, the high comparison base left by the increase in 2020 caused that the nominal increase registered in the collection of 2021 (+ 34% yoy) results in a reduction of another 0.1 pp of the product.
Finally, the tightening of exchange restrictions (the purchase of banknotes in the official market and external payments with cards fell 58% yoy in the first 10 months) and the moderate depreciation of the official exchange rate eroded the collection of the PAIS tax, which it also fell by 0.2 pp of GDP.
These reductions were partially offset by VAT collection, which increased by 0.2 pp of GDP (where imports were strongly influenced by customs VAT) and by fuel taxes, which increased by 0.1 pp of GDP.
In addition to the aforementioned drop in the weight of taxes on the product, in 2021 was added the decline in the weight of contributions and contributions to social security in GDP. Resources destined for social security systems fell by 0.3 pp of GDP (despite increasing 4.5 pp in real terms) mainly as a result of two factors.
- In the first place, due to the dynamics of the tax base (wage bill) based on the timing of the joint ventures, since wage negotiations began in 2021 guided by an official guideline that was quickly overwhelmed by inflation and were reopened in the second part of the year – in fact, the collection of these resources went from low to high, growing 28% yoy in the first quarter and 67% yoy in the last quarter.
- Second, the validity of exemptions arranged throughout the year.
The reductions in taxes and contributions to social security, which together amounted to 0.8 pp of the product, were fully offset by the very strong jump in the foreign trade resources. The recovery of the volumes traded and the significant jump in international prices drove the collection of these levies (despite the moderate official exchange rate depreciation), which increased by 127% yoy (+ 53% in real terms) and showed a rise of 0.8 pp of GDP (led by withholdings, up 0.7 pp).
The strong nominal (and real) rise with stability in terms of the product shown by national taxes was replicated in the case of the provincial taxes, which would have reached 5% of GDP.
The collection of taxes that govern at the subnational level (which account for a fifth of the total tax burden) would have increased by almost 14 pp in real terms in 2021 (+ 70% yoy), showing only a slight increase in relation to the product. The main tax, Gross Income (three-quarters of the total provincial taxes), would have exhibited an increase close to 66% yoy, above the DGI VAT that governs at the national level, but staying around the level of 2020 (3.8 % of GDP). The tribute that stood out at the subnational level in 2021 is the Stamp Tax, which would have increased above 100% yoy (and above 150% yoy in the case of CABA). The rest of the taxes (patents, real estate and others) would have grown by around 67% yoy, remaining in terms of GDP.
Thus, the consolidated tax pressure (national and provincial taxes) would have been 29.5% of GDP in 2021, a level similar to that of 2020. In relation to 2019, the tax pressure showed an increase of 1.3 pp of GDP (or 1.8 pp of GDP if the Solidarity Contribution is included), as a result of the increase of 1.1 pp in national taxes and 0.2 pp in provincial taxes.
In global terms, the tax pressure is still 2 pp below the maximum value reached (2015) but it is almost 5 pp higher than 15 years ago and is one of the highest in regional terms (5 pp below the OECD average but 6 pp above the region).
“Beyond the analysis of the level of tax pressure (which is historically and regionally high), which concerns an aggregate indicator, it is also relevant to inquire about the effective tax burden (especially considering the high levels of informality), its sectoral distribution , social and regional, and the efficiency and progressiveness of our tax system “, the consultant concluded.
Source From: Ambito
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