He A group of provinces lost about $235,000 million in October as a result of the fall in automatic transfers from the national government. Last month they received $4.1 billion pesos, which implied an increase of 178% year-on-year. The important thing is that, as a result of the money laundering, they lost less than expected.
This is what they point out Argentine Institute of Fiscal Analysis (IARAF) and the consulting firm Politikon Chacoin their latest reports that take data from the National Directorate of Relations with the Provinces of the Ministry of Economy.
“In the month of October 2024, the national government sent to the consolidated provinces plus the City of Buenos Aires $4.1 billion in co-participation, special laws and compensationcompared to $1.5 billion sent during the same period of the previous year,” says the IARF.
The report says that “a nominal variation of 178% was observed” that, discounting the inflationary process of the period, “would translate into a real drop of 5.4%.”
“For his part, co-participation, that is, automatic transfers minus complementary laws and compensations, there would be fell 7.2% in real terms, improving their behavior compared to previous months,” states the study.
In this regard, the IARAF highlights that “given a cJoint real year-on-year increase in VAT plus Profits of 9%, the income earned by the money laundering, would have made this smaller drop in net participation possible (7.2% versus 8.9%).”
This is because the Special Tax paid by all those who launder more than US$100,000 is shared with the provincial governments. That prevented the loss from being worse.
The study adds that the decrease in net participation in October “would be explained mainly by the poor performance of income tax collection (-20.7% real year-on-year) and a good performance in VAT collection (-0.4% real).
How much did the provinces lose?
According to Politikon Chaco, “Calculated at current prices, this contraction generated resource losses for the consolidated provinces and CABA for $235,363 million compared to October 2023.”
“At a cumulative level, the period January – October 2024 closes with a total of automatic shipments for $33.6 billion with a nominal variation of 209.5% year-on-year which, measured in constant currency, would register a drop of 11.9% against the same period in 2023,” says the report.
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The shipments through Federal Tax Co-participation reached $3,764,652 million (91% of the total) and show an interannual variation of 133.2% nominal; In constant currency they registered a decrease of 7.2%, decrease that is mainly supported by the decrease in the Income Tax (20.7% real) and to a lesser extent by the Value Added Tax (0.4% real).
Also sReal decreases are observed in Internal Taxes (22.4%), but Other Co-Participants presented a strong relative expansion (835.4% real) although it is a concept with little participation. For their part, the set of Special Laws and Regimes totaled shipments of $244,910 million (6% of the total) and showed a real interannual expansion of 6%, explained by the performance of the tax on Liquid Fuels, which had a real increase of 113.5 %, and also by the Monotax (82.3%).
The tax on Personal Assets, on the other hand, had a drop of 7.8% real while the resources for Fiscal Consensus Compensation (3% of the total) showed an increase of 47.9% real year-on-year.
Source: Ambito
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