Even though the economy of 2025 will recover and there will be greater activity with inflation, which would be in the order of 25%, according to the consultants who participate in the Survey of Market Expectations (REM) of the Central Bank (BCRA), collection will continue to fall in real termsalthough at a slower pace.
This is estimated by a report prepared by the Mediterranean Foundation in which it is noted that, due to this, the government of Javier Milei It will have to continue adjusting spending this year in order to maintain the fiscal surplus.
The decrease in tax resources will be due to the fact that PAIS Tax contributions will be lost, that during 2024 he left in the cash register Customs Collection and Control Agency (ARCA) the equivalent of 1.2% of the Gross Domestic Product (GDP). It should be remembered that this tax was imposed in December 2019 by the government of Alberto Fernández to discourage the purchase of dollars.
In the long run, due to the serious fiscal problems and lack of Budget control, The tribute began to gain importance in the collection structure, ranking between the fifth and sixth degree of relevance. It began as an additional 30% for the purchase of hoarding dollars and to pay for consumption in foreign currency with a credit card and the government of Javier Milei extended it to all types of sales of dollars for imports of 7.5%, but, At the end of the year, it stopped being applied and this will impact the official coffers.
“Effective collection will ultimately depend on what happens with economic activity and inflation,” says the study by the Mediterránea Foundation. It was done using real GDP increase and inflation assumptions included in the draft budget for 2025, REM forecasts for both variables and an average between both scenarios.
“It is estimated that the collection of the National Public Sector could fall between 0.5% and 1.4% annuallyin constant values in 2025. It means that the Improvements in economic activity will allow between 73% and 91% of resources to be recovered in 2025 resigned by the COUNTRY tax”, raises the hypothesis of the entity based in Córdoba.
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According to the estimates of the consulting firms that participate in the REM, This year the economy would grow by 4.5%, which will reverse a fall of 2.6% estimated for 2024. That is, economic growth will not be enough to recover resources, according to this working hypothesis.
Based on this, the Government would have no other path than deepen “the chainsaw” this year, although in a lesser way than it did in the previous 12 months. The spending adjustment in real terms in 2024 will be around 25% approximately.
Precisely, December closed with a financial deficit of between 0.2 and 0.3 points of GDPAs Luis Caputo said days ago, opening the umbrella for possible criticism from the opposition. The reality is that, in the last month of the year, spending usually increases due to the payment of bonuses to public sector employees and retirees.
The study highlights that ““The first year of Javier Milei’s administration exhibits a notable change in fiscal matters.” “In the accumulated between January and November 2024, the SPN’s financial result improved by 4.3 percentage points of GDP, compared to the same period in 2023, going from a deficit of 3.7% to a surplus equivalent to 0.6% of GDP,” he explains in work.
Likewise, it points out that “the entire weight of the adjustment fell on public spending, given that the total income of the SPN did not vary, in terms of GDP, andn 11 months of 2024, or fell close to 7% if measured in constant pesos.”
“If the magnifying glass rests on tax revenues, they rose 0.6 points of GDP in that period, with real GDP falling, although if the Export Duties (DEX) and the PAIS tax are excluded (they exhibited extraordinary movements in 2024), the rest of the income would have decreased 0.2 points in 12 months,” details the Mediterranean Foundation.
Source: Ambito
