Taxes linked to economic activity showed significant drops during January, the trend will continue and complicate the fiscal balance objective agreed with the IMF. Those related to foreign trade, especially the PAIS tax, continue to rise.
January tax collection data reflect the first impacts of the expected recession of 2024 on public accounts, with a drop in taxes linked to economic activity, while the PAIS tax shows a better performance due to higher rates and the devaluation. The markets are attentive to the viability of the official fiscal balance target with the IMF. Total tax collection fell between 4% and 7% in real terms according to private estimates. Taxes related to the domestic market, such as VAT and Credits and Debits, decreased significantly, indicating an economic contraction. In addition, taxes linked to employment and formal salaries also showed a drop, reflecting the loss of purchasing power and the lack of job creation. The context of uncertainty is reflected in the fall of sovereign bonds and the increase in the exchange rate gap. Despite an increase in export duty revenues due to a higher liquidation following the devaluation, the PAIS tax was the most prominent, multiplying its revenues by four in real terms.
January tax collection data reflect the first impacts of the expected recession of 2024 on public accounts, with a drop in taxes linked to economic activity, while the PAIS tax shows a better performance due to higher rates and the devaluation. The markets are attentive to the viability of the official fiscal balance target with the IMF. Total tax collection fell between 4% and 7% in real terms according to private estimates. Taxes related to the domestic market, such as VAT and Credits and Debits, decreased significantly, indicating an economic contraction. In addition, taxes linked to employment and formal salaries also showed a drop, reflecting the loss of purchasing power and the lack of job creation. The context of uncertainty is reflected in the fall of sovereign bonds and the increase in the exchange rate gap. Despite an increase in export duty revenues due to a higher liquidation following the devaluation, the PAIS tax was the most prominent, multiplying its revenues by four in real terms.
