The collection of the General Tax Directorate (DGI) fell again in July, with a 2.5% retracementmarking the second consecutive month of decline after a positive performance in May, but in line with the deterioration of the fiscal situation that lives in Uruguay. In the accumulated to July, the fall is already 0.8% in the interannual comparison.
The tax collection continues to deteriorate in the country, hand in hand with consumption taxes, such as the VAT and the Internal Specific Tax (Imesi)product of the consumption boom of Uruguayans in Argentina which implies less spending in the local internal market.
Consequently, the DGI re-registered negative figures, this time in July, which showed a drop in 2.5% in gross collectioncompared to the same month in 2022. It is the fifth monthly setback so far this year.
In the detail reported by the official collection agency, income from VAT totaled 24,169 million pesos, a 1.3% less year-on-yearmarking the second consecutive drop, and the fourth in 2023. For its part, the proceeds from imesi was 3,744 million pesos, which meant a 1.5% drop compared to July last year.
Regarding this last tax, it is the third consecutive monthly decrease in the year, mainly driven by the negative behaviors in the consumption of fuels, automobiles and beverages.
In the accumulated up to July, inclusive, the DGI collected a gross total of 353,118 million pesos, a 0.8% less than in the same period of 2022. If the tax refund is discounted —net collection—, the year-on-year decline rises to 2%.
The diversion of consumption, a problem that continues
2023 will be the second time in 20 years that the economy grows but that, on the other hand, the collection has a negative overall result. On this occasion, the reasons are mainly in the deviation of Uruguayan consumption towards Argentine territory, to the point that half of the growth in domestic consumption projected for this year —1.5% of the 3 points of improvement that are expected— will be outside the borders, according to the consultant lush.
This directly impacts the collection, while the income from excise tax They are the main source of income for the State Fund, with a participation of 54.8%. In this sense, between January and July, the DGI registered a 2.6% decrease in these taxeswith real falls of 1.8% in VAT and 6.9% in the Imesi.
According to him Center for Development Studies (CED)this deviation in consumption caused by the exchange difference with Argentina will exceed 1 billion dollars this year, in a “conservative” screening of the institute.
Source: Ambito
