Nicolas Perez - Oficina de Presupuesto del Congreso

SITUATION OF THE ARGENTINE INTEGRATED PENSION SYSTEM (SIPA)

by Nicolas Perez | Jun 28, 2022 | Employment and Social Security

The pension system administered by ANSES had 9,905,314 contributors as of December 2021, representing 48% of the economically active population.
There were 5,420,234 beneficiaries, 75.9% of the population within the theoretical retirement age.
Of the benefits granted, 95.9% belong to the general system and two thirds of them are beneficiaries of moratoriums.
There are 29% of informal workers who are not covered by any regime and more than 600,000 beneficiaries continue to work to supplement their pensions.
The system only covers 51% of the benefits it pays. To close the gap: either the active contributors are doubled or the contributions on remunerations are increased by 26 percentage points.
Simplified regime single taxpayers represent 16.9% of the population making contributions, but they account for only 1.3% of the system’s contributory financing.
About 1.3 million people are unemployed and do not make any contributions.
A priori, the pensions of the general system do not allow maintaining the level of consumption of the economically active population. A reduction in the replacement rate would move further away from the main principles of a pension system, which is to guarantee the intergenerational distribution of income.

SITUATION OF THE ARGENTINE INTEGRATED PENSION SYSTEM (SIPA)

TAX RELIEF BILL – CHAMBER OF DEPUTIES’ APPROVAL – JUNE 2022

by Nicolas Perez | Jun 21, 2022 | Cost Estimates

This report analyzes the text approved by the Chamber of Deputies on Tax Relief for Small Taxpayers and Self-Employed, amended with respect to the original Bill that was analyzed by the OPC in the report “BILL 2634-D-2022. TAX RELIEF FOR SMALL TAXPAYERS AND SELF-EMPLOYED”. This document updates the fiscal impact estimates.

The main differences between the text approved and the Bill previously analyzed include a different scale of brackets for the taxpayers subject to the Simplified Regime for Small Taxpayers (RS) and the exemption from payment of such tax for certain taxpayers of the new Categories A and B, in addition to the modification of the section related to self-employed taxpayers, increasing the special deduction of Income Tax with respect to the text of the original Bill.

As for the analysis of the fiscal impact, the changes introduced imply a greater decrease in revenue compared to the previous estimate: ARS11.067 billion for the RS (in the previous text it had been estimated at ARS4.566 billion) and the effect on the determination of Income Tax would imply a reduction of ARS55.223 billion (in the previous text it had been estimated at ARS29.73 billion).

It is important to remember that, for the Income Tax, if there is no adjustment in the current regulations on the amount of the advance payments to be made, the effect on the tax revenue would start to be observed as from June 2023, once the tax return for the fiscal year 2022 has been filed.

BILL 2634-D-2022 – TAX RELIEF FOR SMALL TAXPAYERS AND SELF-EMPLOYED – JUNE 2022

by Nicolas Perez | Jun 15, 2022 | Cost Estimates

This report analyzes Bill 2634-D-2022 on Tax Relief for Small Taxpayers and Self-Employed.

As for the analysis of the fiscal cost related to the Simplified Regime for Small Taxpayers, the estimate refers to the effect that would cause the recategorization of taxpayers who are close to the upper limit of each category. Consequently, a maximum loss of tax revenues of ARS4.566 billion is estimated.

On the other hand, the proposed increase in the Special Deduction for self-employed taxpayers would result in a reduction of the Assessed Tax accrued for the 2022 tax period of ARS29.730 billion, which would not represent a reduction of tax resources for the year 2022 given the way this tax is determined, assessed, and paid.

Thus, the impact on the Treasury and taxpayers would be reflected as from June 2023.

However, since the advance payments of individuals are calculated by applying a rate of 20% based on the tax determined in the previous year less the deductible items, if the taxpayers or the regulation of the law enables a reduction of such advance payments, then a reduction of revenues could be verified this year.

PUBLIC DEBT OPERATIONS – MAY 2022

by Nicolas Perez | Jun 13, 2022 | Public Debt Operations

Securities totaling ARS996.266 billion were placed in two auctions.
Net Temporary Advances for ARS143.949 billion were cancelled.
In early June, the Argentine authorities and IMF staff reached an agreement as part of the first review of the EFF program. Argentina would receive a new disbursement of USD4.030 billion.
June debt maturities are estimated at USD9.979 billion, of which USD2.719 billion are payments to the IMF.

ANALYSIS OF NATIONAL TAX REVENUE – MAY 2022

by Nicolas Perez | Jun 9, 2022 | Tax Revenue

Tax revenue amounted to ARS1.551,370 trillion in May 2022, which implied a growth of 79.9% year-on-year (YoY). Adjusted for inflation, it expanded 12.3% YoY.

The recovery in the level of activity since March 2021, the increase in international commodity prices and the rise in the nominal exchange rate (25.2% YoY) contributed favorably to this result.

Among tax resources, the increase in real terms in the PAIS Tax stands out because of the return to foreign travel as COVID-19 restrictions are removed. Income Tax, Wealth Tax and VAT also recorded significant growth.

Duties on Foreign Trade decreased given the lower export quantities recorded.

On the other hand, Social Security contributions showed a significant year-on-year growth.

ANALYSIS OF NATIONAL GOVERNMENT BUDGET EXECUTION – MAY 2022

by Nicolas Perez | Jun 9, 2022 | Budget Execution

During the first five months of the year, the primary deficit amounted to ARS775.379 billion, which implies an increase in real terms of 196.1% with respect to the previous year. Adding debt interest, the negative financial outturn grew by 80.3%.

Total revenue (ARS4.248,739 trillion) grew 1.9% YoY, driven by tax revenues and Social Security contributions. However, non-tax revenues were 52.3% lower due to the contraction of the Solidarity Contribution by 96.9%.
Total expenditure amounted to ARS5.496,658 trillion and grew at a rate of 13.1% YoY.
The variations recorded in subsidies (29.8% YoY) and in current transfers to provinces (23.0% YoY) stand out. Energy subsidies increased 49.4% YoY.
As of May 31, total expenditure amounted to ARS5.496,658 trillion, equivalent to 50.6% of the current budget appropriation.
Within current expenditures, interest on debt (61.3%), family allowances (60.3%) and social programs such as Progresar grants (81.6%) and Potenciar Trabajo (65.3%) stand out, which will require budgetary reinforcements to continue with the execution rate of the first 5 months of the year.