April revenue plummeted: up 11% vs. 48% inflation

05/05/2020 - 11:02

• Clarín.com
• Economy
• Economy

The official statement will be released this afternoon but a payroll that was released from the official dispatches shows that the April collection collapsed: compared to the same month last year, it rose just 11.6% innominal terms, which means that in real terms, it collapsed around 30% against an average inflation of 48%.

April is the first month in which the impact of quarantine on the economy can be fully seen. Within the collection there are two taxes that stand out because they alone explain 70% of the income: VAT and Profits. The payroll with the April data, which bears the letterhead of the Ministry of Economy, states that last month VAT grew 8.3%, while Earnings rose just 1%. These are the data in nominal terms, but when the effect of inflation is applied - estimated at 48% for the 12 months from April to April - the drop exceeds 30%

Export duties, which had been increasing at a 45% year-on-year rate, were  up just 18% this time. Employer contributions, affected by the reductions that the government ordered for critical sectors, barely grew 0.1% 

The paralysis of activity had a double impact on public revenues: on the one hand, with the majority of shops closed, sales collapsed. On the other hand, due to the lack of income, many taxpayers chose to stop paying taxes to have an extra margin to get ahead during the quarantine.

Thus, the return shows income of $ 398,659 for the past month, $ 45 billion less than what had been received in March of this year.

An IARAF report details that in April VAT collection fell by 27% in real terms, while that of Earnings fell by 31 %. The sum of both represent 78% of the tax collection, and this sum fell 29% in real terms.

In this framework of collapse of resources and assistance to the sectors hit by the quarantine, the Collection Agency of the province of Buenos Aires (ARBA) rescheduled for July 15 the payment of the third installment of the Gross Income advance , which had its final expiration on May 15. In this way, the quota received its second postponement since, originally, it expired in April and had been postponed for May.

So far in the quarantine, in addition to the postponement of Gross Income, ARBA extended quotas and advances of payment plans, extended the suspension of liens to debtors and extended maturities of the Real Estate Tax.

These measures favored more than 3.5 million families and companies , which implies for the province of Buenos Aires a fiscal effort of more than $ 3,350 million.