Tax collection in October showed, for the second consecutive month, an interannual growth in real terms and reached $612.146 million, as reported this Monday (02.10.2020) by the Ministry of Economy in a official statement.
In detail, the collection had a nominal increase of 43,9% in relation to October 2019. If the accumulated inflation of 36,6% in the same period is taken into account, a positive variation in real terms of 5,3% is reflected.
“The improvement in the collection of the month of October responded both to the gradual recovery of economic activity and the slowdown in the general price level, a result that contributes to the financial normalization of the National Public Sector,” the Ministry of Economy said in a statement.
And he added: “Just like last month, within the framework of strengthening the sustainability of public finances, the resources that drove this increase were mainly those associated with the Law of Social Solidarity and Productive Reactivation (Personal Property, Profits, Contributions and Employer Contributions, among others) that had been affected by the Covid-19 pandemic."
In particular, the subtotal of taxes of the The General Tax Directorate (DGI) recorded a 61% year-on-year increase. This boost was mainly driven by the Personal Property Tax (+592% yoy), Income Tax (+76% yoy) and Shared Internal Revenue (+46% yoy).
As to Value Added Tax, although year-on-year growth in October is still below inflation (+26,4% yoy), it has been registering “significant improvements” in recent months.
As for taxes associated with social security (+32,4% y-o-y) a divergence can be observed between Personal Contributions (+51,3% y-o-y) and Employer Contributions (+22,9% y-o-y). “This is explained particularly by the impact of the 95% reduction in employer contribution rates for health sector activities and those critically affected by the pandemic, a phenomenon that reflects the fiscal effort that the National State continues to make,” explained the portfolio led by Martín Guzmán.
Lastly, taxes General Directorate of Customs (DGA) recorded a year-on-year variation of 18,5%. “This performance was influenced in particular by taxes on foreign trade,” the official report noted.
In the case of Export Duties (+1,8% y-o-y), influenced by the advancement of operations recorded in the same period of 2019 to the detriment of 2020 and the reduction of the rates of rights for the provision of services, hydrocarbons, mining, certain industrial goods and inputs, the soybean complex and the automotive sector announced in October.
Regarding the Import taxes (+15,8% yoy), its performance was affected by the drop in imports as a result of isolation measures.
“In this context, the sustained recovery of national revenue is a necessary condition for the macroeconomic stabilization of Argentina. Likewise, the dynamics of national tax collection observed in the last two months denote positive signs associated with the incipient economic recovery following the outbreak of Covid-19," he concluded.
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