Tax evasion in Argentina remains close to 50%: which sectors are the most highlighted

The relationship between greater VAT evasion and a greater incidence of unregistered salaried employment – and vice versa – remains valid in general terms. Regarding VAT evasion, in 2022 It reached its lowest level in the historical series, standing at 49%, compared to the 52% registered in 2021. However, both values ​​remain around the average of 50% that characterizes the entire series analyzed.

This is stated by Diego Rivas and Lucio Cardinale, authors of the report “Diagnosis of informality in the Argentine economy”, where they analyze the problem of tax evasion in the country. The report was published by the Center for Tax Studies (CET) of the University Southern.

“In 2022 The collection grew more than the taxed activity. And it is the year in which there is the greatest difference between the growth of collection and that of taxed activity in the entire series. While the taxed activity grew by 74%, the collection grew by 88%,” detail the CET researchers and predict: “In this way, we can predict that the The drop in evasion by 2022 effectively has to do with greater tax compliance. It is worth remembering that, during this year, the tax moratorium implemented by the Tax Relief Law took place to strengthen the economic and social solution to the pandemic generated by COVID-19 (27,653/2021).”

The report indicates that the decrease in Evasion was mainly driven by the services, agriculture and construction sectors. While in 2021 evasion increased 12 percentage points in agriculture, 11 points in services and 7 points in industry, in 2022 agriculture managed to reduce it by 2 percentage points, services by 4 points and construction by 5 points.

Likewise, the report highlights that, for the fourth consecutive year, The ranking of sectors with the greatest evasion remains unchanged. Construction leads as the sector with the highest level of evasion, followed by services, agriculture, commerce, industry and, finally, mining as the sector with the lowest evasion.

Evasion and unregistered employment

Regarding the incidence of unregistered salaried employment, specifically for 2021 and 2022, lthe only exception to the rule that “the greater the evasion of VAThigher incidence of salaried employment” is presented by agriculture and construction, since agriculture shows a higher incidence of unregistered employment, but less evasion than construction.

“2016 was the only year in which agriculture and construction respected this rule, with agriculture with a higher value of both unregistered employment and evasion. In the following years, agriculture always presented more unregistered employment with less evasion than construction,” Rivas and Cardinale maintain. For CET researchers, this is due to the downward trend of evasion that agriculture presents in the series, with constant values ​​of unregistered employment.

How to combat tax evasion, according to the report

For specialists in Universidad Austral an alternative to reduce the numbers of informality would be focusing formalization policies on those sectors where greater evasion is generated and which, at the same time, have greater weight in the potential collection of VAT, “since it is not only there where there is greater room for improvement, but in the face of the “The same increase in tax compliance would have a greater impact on collection.”

“The focus should be on: services sector, which was ranked among the first 3 sectors with the highest evasion every year and it is the one that has the greatest weight in potential collection. Construction, one of the sectors with the greatest evasion for all years, The podium is completed among those with the greatest impact on potential collection. Commerce, which, although it ranks 4th among the sectors with the greatest evasion, was always close to the average level of the economy, and is the second sector with the greatest weight in potential collection,” the CET concludes.