The Government has committed to lowering the PAIS tax rate from 17.5% to 7.5%. Although this will affect tax collection, it may encourage the accumulation of reserves.
Starting in September, the rate of one of the taxes that has gained the most importance in recent years will be reduced: the PAIS taxWith this measure, the Government will lose tax revenue but at the same time will lower the cost of imports: Analysts are debating how this could impact inflation and the price of the dollar.
According to the commitment made by the Executive Branch after the approval of the fiscal package in Congress, the PAIS tax will drop from 17.5% to 7.5%It is worth remembering that this would be the same rate that the Frente de Todos left, since it was the current administration that had made the decision to increase the percentage.
How can the reduction of the PAIS Tax impact inflation and the official dollar?
According to estimates by the economist Fernando Marullthis would imply a an increase of US$1 billion per month in imports due to the lower effective price that companies importing products from abroad will have to pay. The specialist also foresees a 0.7 point reduction in September inflation as a result of the measure.
For his part, the former Minister of Economy, Sunday Cavallo, He argued weeks ago that the tax reduction leads to an increase in the price of the official exchange ratewhich would help reduce the gap with the parallels but would neutralize the effect on the potential slowdown in inflation.
Pablo Moldovandirector of the CP consultancy firm, estimates that the reduction of the PAIS tax, would facilitate the dismantling of the “dollar blend” schemein a context in which the Central Bank (BCRA) needs to accumulate reserves to meet debt obligations.
To compensate for the fall in the effective exchange rate for exporters that this would imply, the economist estimates that The Government could devalue the official currency by 7% “since the reduction in the tax would more than offset the effect on import costs and neutralize the effect on the export exchange rate.”
What will happen with credit card purchases in dollars?
It should be noted that the 10 percentage point cut It will not affect dollar transactions made with credit cards and the purchase of foreign currency for hoardingwhich today operate with the “tourist dollar”/”solidarity dollar”/”card dollar”/”savings dollar”, among other names.
The tourist dollar today is quoted at $1,536, thus leaving a gap of 14% with the blue dollar (+186) and 21% with the financial dollar (+$270 approximately). Therefore, It is still more advantageous to pay off the card’s foreign currency due dates with foreign currency taken from the dollar savings account than to do so with a card, or by buying MEP dollars. for the occasion.
Impact on tax collection
The PAIS Tax became one of the most important in tax collection, behind VAT, Income Tax and taxes linked to Social Security. It was undoubtedly the one with the greatest growth.with a nominal year-on-year jump of 965.5% in July, so its reduction could have a negative impact on the fiscal balance path sought by the economic team led by Luis Caputo.
Source: Ambito
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