Ámbito Financiero – From the floor that occurred between April and May, collection has been showing a slow recovery, but last month there were some signs that the process stopped.
The two most important components of tax collection, the Value Added Tax (VAT) and the Income Tax, had a real drop of around 24% in real terms in July, according to estimates by the Center for Argentine Political Economy (CEPA) ). These data, especially VAT, reflect more than anything the state of economic activity in the previous month, June, when quarantine was still in force with some flexibility in the Metropolitan Area of the City of Buenos Aires (AMBA). In other words, they do not take the effect of the fifteen days of “reinforced” isolation in the first half of last month.
The CEPA study is based on official data and the transfers sent by the national government to the provinces. “Considering co-participation transfers, the drop in VAT collection is around 24.6%. This shows the activity of the month prior to the collection, tied to the ability to pay in the month of July, “says the work. Indeed, taxes due in one month actually accrued in the previous one.
For CEPA, the drop of the order of 24% “implies some continuity with respect to the month of June (-18.5%) and above the estimates of March (-13.5%) and April (-16.9%) ) ”. The study center warns that “the evolution of VAT in real terms is an accurate thermometer of consumption performance in that month.” On the other hand, the private report estimates that “in the case of Income Tax, the fall in July would reach 24.5%, close to the figures estimated in April 2020 (-27.4%) and May (24, 9%) ”.
Tomorrow the Federal Public Revenue Administration (AFIP) led by Mercedes Marcó del Pont is scheduled to report the data from last month’s tax collection, which has been showing a slow recovery after a real drop in April of 23%. In May it fell 22.3% and in June 15.2%. If CEPA estimates were met, tax revenues for the month just ended would have deteriorated again in real terms, although not significantly.
The economist Iván Cachanosky, from the Fundación Libertad y Progreso, told Ámbito that “logic indicates that as activity has been falling, collection will also drop.” The economist indicated that this variable of the economy “rebounded a little after the April and May floor.”
According to Cachanosky “it is very likely that we will see the last semester of the year
with an acceleration of inflation, and therefore, a decrease in real terms of tax revenues is observed ”. The economist estimated in this sense that it is possible that in August and September the AFIP’s income will remain at levels similar to those of June.