Budget 2025: Government warns that it will raise taxes next year

The former director of Customs Guillermo Michel rejected the 2025 Budget project presented by the president Javier Milei on Sunday night, warning that “Contrary to what was promised during the campaign, taxes are risingeven in relative terms with respect to GDP.”

“For the Government itself, the pressure tax rate would rise from 22.37% of GDP in 2024 to 22.92% in 2025”Michel pointed out through his X account. He detailed that the Income tax paid by workers “goes from 4.42% of GDP in 2024 to 5.05% in 2025” while “Export Duties (agricultural and productive sector) will increase from 0.96% in 2024 to 1.43% in 2025.”

On the other hand, he explained that the Fuel Tax “goes from 0.38% of GDP in 2024 to 0.73% in 2025, while”the pressure on the self-employed doubles.”

“The single tax goes from 0.04% of GDP in 2024 to 0.09% in 2025”, said the former official, who promoted the information exchange agreement with the United States, the results of which are being seen during the current government administration.

Michel stated that “The collection of the Personal Property Tax is estimated to reach $833,345.8 million, showing a decrease of 22.7%.” This decrease “sThis is mainly explained by the modifications introduced by Law 27,743. which increased the general non-taxable minimum and the one linked to housing,” says the former official.

He also states that “in turn, reduced the rates applicable to assets located abroad, equalizing the tax treatment in this regard with those located in the countryincluding a modification of scale sections and differential treatment for compliant taxpayers.”

He also warns that “The special income regime of the Personal Property Tax (REIBP) would negatively affect the collection corresponding to individuals for the year 2025”.

In this regard, he said that “except for taxpayers with high assets abroad, The rest of the citizens have made a useless sacrifice until now because taxes continue to increase.”

Tax pressure in the spotlight

He Strategic Planning Center of Córdoba (CEPEC) points out in a report that the current Budget indicates that “the projected tax pressure for 2025 is 22.92% of GDP, compared to 22.37% in 2024.”

“This Slight increase in tax pressure is justified by expected increases in economic activityforeign trade, and other factors. However, The estimate of significantly higher nominal revenue may seem overly optimistic, “since it depends on assumptions about economic growth and prices that may not fully materialize,” says CEPEC.

The Government’s hypothesis is that next year the prices of grains exported by Argentina will recover and that Vaca Muerta will begin to generate greater energy exports, which will boost the collection of withholding taxes by 100%.

For its part, the The consulting firm Epyca states that “tax revenues for 2025 are projected at $71,212,561 million (+29.4% compared to the estimate for 2024 and 9.3% of GDP).

• The largest increases would be in the single tax (which would triple from one year to the next), fuels (155% increase), export duties (which would double). “This last piece of information is curious: with increases of 23% in the official exchange rate on average and 9% in the value of sales of goods and services abroad, “Why would the amount collected from export duties be doubled?” the consulting firm raises.
• The PAIS Tax is expected to disappear, which implies fulfilling the promise of eliminating it on December 31 of this year.
• Tax revenues are expected to grow by 35.4% year-on-year. If an inflation rate of close to 40% is expected for the average year and a GDP growth of 5%, revenues should be higher. “This lower relative revenue could then be understood in light of the presidential announcement that any excess revenue would be returned to taxpayers,” says Epyca.