The purpose or objective of tax legislation not only aims to provide resources to the National State so that it can perform its functions, but it can also be an element to guide or discourage consumption, as well as favor or support certain sectors or activities in a form particular.
The National Directorate of Fiscal Investigations and Analysis has published the list of taxes in force in the country, classifying them into 6 types of taxes or tributes. Of them, the most distorting are those grouped under the title of Internal Taxes on Goods and Services. The taxes that make up this group are:
IV.1 – Value Added Tax
IV.2 – Internal Taxes
IV.3 – Taxes on liquid fuels and carbon dioxide
IV.4 – Electricity tax
IV.5 – Additional emergency tax on cigarettes
IV.6 – Special Tobacco Fund
IV.7 – Tax on tickets for cinematographic shows
IV.8 – Tax on recorded videograms
IV.9 – Tax on audiovisual communication services
IV.10 – Surcharge on natural gas
IV.11 – Specific tax on placing bets
IV.12 – Indirect tax on online betting
IV.13 – Tax for an inclusive and supportive Argentina (PAIS)
Taxes IV.3, 4, 5, 7, 8, 9, 10 and 13 should be eliminated immediately, since they are taxes that impact the sectors in which they fall, causing the values of the goods and services produced to decrease. increase by making them unnecessarily expensive.
Regarding internal taxes (which are made up of sectors such as the consumption of alcoholic beverages, alcoholic beverages, luxury goods, etc.), it is important to analyze here which sectors should be left to discourage consumption that is harmful to the health of society and which ones should be eliminated. for causing an effect similar to that described in the previous paragraph.
Another highly distorting tax, which is classified within taxes on wealth (according to the National Directorate already mentioned) is the tax on bank debits and credits and other operations.. This tax is charged on deposits and withdrawals from bank accounts or operations carried out in replacement of said accounts. And as to alleviate its harmful effect, it is allowed to be paid on account of income tax but up to a certain limit, and now for SMEs it is partially allowed to be computed against social security contributions. This tax should be eliminated directly.
The distortion is not only caused by the taxes that fall on different economic activities, but also the ways in which these taxes must be paid. Clearly, the withholding and perception schemes in force today are highly abusive and generate financial harm to companies.having to resort to loans to finance themselves, the cost of which in terms of interest is very high.
Quickly, the Government must analyze the reduction of these payments on account to give financial comfort to companies. Tax advances for the National State must be sufficient to cover its expenditures, which, if well determined and planned, it would not be necessary to implement other payments on account.
Which ones are immovable?
74% of tax revenue in 2024 comes from income and value added taxes. These taxes are the basic ones that exist worldwide, given that they capture two clear manifestations of contributory capacity, such as income and consumption. We could consider these taxes immovable, but the level of taxation should be reviewed so that they do not become regressive..
The second place is occupied by taxes that fall on assets, such as, for example, the tax on personal property, on the capital of cooperatives and the tax on bank debits and credits already mentioned, with a 13% share of tax revenues. .
These are the taxes that could be legislated to direct capital towards productive sectorsas was the original tax on personal property, called “Tax on Personal Property not incorporated into the economic process.” Thus, the generation of projects that provide employment, promote entrepreneurs, etc. could be encouraged, as long as capital is in movement and not only revolving around financial income.
How can this measure impact the level of collection?
It does not seem prudent to talk only about the impact of these measures at the collection level. Logically, if the elimination of taxes is done abruptly, from one day to the next, collection will fall and the State will not have funds to cover its expenses, an effect that the provinces will also suffer due to the taxes that are eliminated and are co-participatory.
But we must bet on growth as a country, with a strong boost to its industries and activities.so it will be necessary to study how to eliminate distortive taxes while thinking about measures that promote the development of new industries and activities, encourage the establishment of new companies, continue supporting small businesses. entrepreneurs, and other medium and long-term measures that promote the sustained growth of the country (and throughout its territory).
It will take a while until the wheel turns fast enough so that revenue is recovered based on the goods and services marketed and not by force of collecting taxes at the expense of the population.
Tax Manager at PGK Consultores
Source: Ambito