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The Government wants to see lower prices on the shelves due to the reduction of the PAIS tax: what it asked of supermarkets - Infobae
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El Gobierno quiere ver precios más bajos en las góndolas por la baja del impuesto PAIS: qué les pidió a los supermercados
Los funcionarios del equipo económico se reuniones con supermercadistas y empresas alimenticias para afinar el impacto del recorte impositivo. Cuánto podría bajar la inflación de septiembre por esta medida
www.infobae.com
August 29, 2024
Officials from the economic team met with supermarkets and food companies to fine-tune the impact of the tax cut. How much could September inflation fall due to this measure?
By Mariano Boettner
A woman shops at a supermarket in Buenos Aires, Argentina, in a file photo. EFE/Enrique García Medina
The Government hopes that the reduction of the PAIS tax that will take place from next Monday will impact the shelves and for that it seeks to have the supermarkets as allies, to whom it has asked to demand from their suppliers in the mass consumption industrial chain, lower prices due to the reduction in the cost of their production.
The idea arose during conversations between national government officials and supermarket owners between Monday and Tuesday. Yesterday, the Minister of Economy, Luis Caputo , announced that the reduction of the PAIS tax rate from 17.5% to 7.5% for access to foreign currency for the payment of imports and freight will be operational from Monday, the first business day of September.
The economic team held meetings with supermarkets , but also upstream in the manufacturing chain with mass consumption producing companies . The expected impact on prices would not be linear at 10 percentage points, since it depends on the incidence of the imported input in each case. The underlying intention is that the margin gained by the entire chain due to the tax cut is not “lost” along the way and reaches the consumer on the shelf.
Supermarkets argue that this transfer will depend entirely on the manufacturers and that for large retail chains the impact on prices will only occur in the handful of imported foods that they sell directly on the shelves after importing them (bananas, avocados, tuna, coffee, canned goods) and others such as electronics or household goods, explained a source in the sector.
Caputo said that in September there will be an impact on prices due to the reduction of the PAIS tax (Argentine News)
Thus, pressure will operate on the entire chain in two ways, according to official and sector sources. On the one hand, supermarkets and suppliers will "push" for prices with a lower cost due to the tax reduction, but the possibility of direct, cheaper imports will also be at stake if the local chain does not realign its prices. The supermarkets had meetings this Tuesday with the Coordinating Secretary of Production, Juan Pazo , and the Secretary of Commerce, Pablo Lavigne .
The same line was taken with the Copal food chamber on Monday. The entity assures that the effect of the measure on prices depends on each sector and the incidence of inputs or imported raw materials for production.
Copal took the opportunity to present to the officials other tax measures that they expect in the future. “The next step will be in December with the completion of this tax and the discussion of the rest of the tax reduction agenda and the continuation of the initiatives for productive reactivation,” they mentioned.
The Government hinted that there will soon be more measures of this type , some of which will be announced this week. The sequence of tax reductions has not yet been made explicit, although President Javier Milei had already mentioned, a few months ago, that after PAIS, withholdings and the tax on checks would follow , although in magnitudes and times not yet determined.
Some clues to this could come in the 2025 Budget project , which the Ministry of Economy will present on September 15 and which could include among its assumptions a roadmap with tax reductions already incorporated.
The Ministry of Economy had asked supermarkets a month ago to lower prices when the reduction in PAIS tax rates takes effect
“I think that in September we will see a drop in prices . We have gathered with many cameras, cars, appliances, food, motorcycles; precisely to transmit this to them, to transmit to them that people have to receive and perceive from the other side. The important thing is that they understand that together we have to build again, the system of speculation is useless because it is bread for today, hunger for tomorrow, and really the reaction of everyone has been very good, I have good perspectives,” said Caputo on Wednesday.
The Minister of Economy himself had already suggested, in meetings with supermarket owners and mass consumption entrepreneurs a month ago, that the reduction in the PAIS tax would have to result in a nominal reduction in prices.
The FMyA consultancy, meanwhile, measured what the impact on prices of the reduction of the PAIS tax would be. “In September, with the reduction of the PAIS tax by 10 points (which implies a 0.7 point reduction in wholesale inflation ), we estimate that inflation will fall to 3% monthly, significant but far from the 1% that the government predicted, or even the 2% crawling rate,” it said.
Delphos Investment, meanwhile, explained in a report to clients: “The impact on the price trend (due to the reduction of the PAIS tax) is more diffuse since the transfer to the retail prices of imported goods will take place over the course of days/weeks. In an intermediate scenario, the reduction in the CPI in September could be estimated at 0.5/0.6 percentage points , contributing to the disinflation process.”
Finally, Econviews stated that “currently, imported wholesale prices take the official dollar as a reference much more than before Milei took office.” “In times of greater restrictions, importers were guided by the parallel dollar to set prices and not by the official one. This change that occurred after the elimination of the SIRA and the progress in the normalization of foreign trade makes the impact of the tax reduction have a greater effect. Logically, it will be a one-time effect and will not affect all products in the economy, but it will be a help anyway,” they concluded.
