The Tax for an inclusive and Solidarity Argentina (PAIS) will close its cycle this Monday at 24 and will have left a contribution to the treasury of something more than US$17.3 billion, the equivalent of 3% of the Gross Domestic Product (GDP). It was an important tool for increase the collection during the first year of Javier Milei’s government, a period marked by a drop in income for the treasury.
The tax served to offset the fiscal effects of the adjustment on economic activity. According to analysts, the challenge will be to replace its contribution through recovery of activity.
But The other important effect that its extinction will generate is that it will promote a drop in inflation of the first months of 2025. It must be remembered that to improve its fundraising potential Luis Caputo raised the rate to 17.5% for imports in general and left it at 30% for card purchases and trips abroad.
Imported prices
By contrast, The first months of the year that is about to begin should give lower inflation levels compared to the same period last year, and also with the last months of 2024.
It is worth remembering that in reality, the COUNTRY Tax It is no longer charged on new imports as of November 23, because this tax was paid 95% in advance. Wisely, the Customs Collection and Control Agency (ARCA) decided to cancel this modality devised by the former head of Customs Guillermo Michel whose purpose was to ensure tax collection. An advance of a tax could not be collected that at the time of paying the final balance no longer exists.
If the latest INDEC form is taken into account wholesale pricesthe national products rose 1.6% in Novemberwhile imported ones fell 1.2%. And that is due to the decline in the price of the dollar. Already from December It will be added that imported ones stopped paying 30% COUNTRY tax.
Without tax, inflation goes down
The effect that analysts expect is a sharp decline. The Libertad y Progreso Foundation estimates that next year’s CPI will rise 25% compared to the 18.5% that the government put in the Budget thatIt has not yet been discussed in Congress and it probably will not be discussed.
The disappearance of the tax on the purchase of dollars will have an important role throughout next year, now that it is going to be done extensive to services that play an important role in the public’s pocketsuch as streaming platforms, cell phone applications and licenses for the use of software.
According to a report, the Argentine Institute of Fiscal Analysis (IARAF), The tax will have passed through history and will leave a revenue equivalent to US$17,300 billion. According to the private consulting firm, this year contributed 1.1% of GDP. In 2020, which was the first year of its application, it left 0.5%; in 2021, 0.24%; 2022, 0.42% and in 2023, 0.80% of GDP.
between andJanuary and November of this year, According to the ARCA tax collection form, tax generated $6.16 billion. Last month it contributed $389.4 billion. It is likely that due to the elimination of the 95% advance in December it has collected somewhat less.
Source: Ambito
