Argentina Sees 20 Percent Boost In Tax Revenues
July 3, 2012 Taxation in Argentina
BUENOS AIRES – Tax revenues in Argentina are growing significantly, but have not kept pace with government spending or inflation, pointing to a potential slowdown in the economy over the coming months.
On June 2nd the Federal Administration of Public Revenue (AFDIP) of Argentina released a statement saying that the tax revenues over the month of June reached ARS 58.68 billion, having risen by 20.6 percent compared to the same period last year. However, tax collections throughout the month were also 3.8 percent lower than in May, indicating that the country could see an economic slowdown over the coming months.
Collections of corporate and personal income taxes were the largest contributors to tax revenues, accounting for ARS 16.04 billion together. Collections of VAT brought in approximately ARS 15.39 billion, having risen by over 25 percent compared to June 2011.
According to taxation experts in Argentina, the significant increase in tax collections can be attributed to steadily increasing salaries of workers in Argentina, and the country’s high inflation level, which is currently estimated to sit at approximately 25 percent.
Despite the increase in revenues, the government still saw a decrease in its budget surplus in June, as spending increased faster than revenue growth.
Economic analysts have pointed out that the revenue growth has not kept pace with the country’s inflation rate, and in addition, economic indicators show that industrial production in Argentina is declining, pointing to a potential slow down in tax collections in the coming months.
Photo by Mr. T in DC