July 23, 2014
Tax revenue up 37% to $92.74B
VAT inflow rises 47.5 percent in April compared to last year
The country’s tax revenue rose by 37.1 percent in April from a year earlier to 92.74 billion pesos (US$11.6 billion), the AFIP tax bureau head Ricardo Echegaray revealed yesterday, coming in well above the median forecast of 87.719 billion pesos in a Reuters poll of analysts.
The increase in tax revenue can largely be explained by double-digit consumer price increases.
Export duties raked in a record 14.513 billion pesos, or a whopping 64.8 percent rise on the amount collected the same month last year.
Higher revenue from these duties is largely explained by companies receiving more pesos per dollar following the near-20 percent devaluation implemented in January and the ever-important sturdy international price of soybeans.
April marked the first month of the thick of the harvest season, and soy traded steadily at approximately US$500 per ton in Chicago amid forecasts of a record 55-million ton total by the end of July.
Up to Friday last week, grain export companies had settled US$7.805 billion, according to the CIARA and CEC export chambers, with three months to go to beat the record of US$25.133 billion set in 2011. More than US$2.9 billion was settled in April alone.
“There was important settlement by the farming sector,” Echegaray recognized, pointing to soy “pellets, which rose by (an inter-annual) 93.1 percent.”
The AFIP head said Brazil and China “were the chief markets for exports in April, accounting for 18.3 and 9.3 percent” of the total, respectively.
Import duties brought in the comparatively low amount of 2.531 billion pesos, a 36.7 percent increase.
The amount that flowed into the state’s coffers via the Value-Added Tax (VAT), 47.5 percent more than in April last year, suggests the effect of a high level of inflation even if analysts agree the fourth month of the year saw a deceleration in rising prices.
The 27.294 billion pesos of revenue from VAT was a new record, which AFIP explained as the result of “greater consumption, a greater quantity of sales and more VAT-registered contributors.”
In March, the month with the lowest inflation so far this year at 2.6 percent, VAT collection rose 38.9 percent, while inflation of 3.4 percent in February was matched by a 35.5 percent increase in funds amassed through the tax.
The INDEC national statistics bureau is scheduled to release its monthly Consumer Price Index report on May 15.
“There was a strong control process conducted by AFIP for more people to register,” Echegaray said about the VAT tax.
With an adjustment of the income tax floor upward from the present 15,000 pesos currently under debate among politicians, the total collected from the levy last month rose 43 percent to 15.793 billion pesos.
In February, revenue from income tax had risen by a similar 41.2 percent to 18 billion pesos, while in March, the amount collected had only risen 27.8 percent to 14.939 billion pesos.
Employers had to cough up 20.9 percent more, or 13.193 billion pesos, possibly implying that wages were not raised parallel to inflation, albeit many negotiations are still ongoing.
Echegaray and Treasury Secretary Juan Carlos Pezoa also reported a 40.8 percent hike in revenue from the tax on credit and debit, which surged to 5.675 billion pesos.
“We had told you that we had set an objective of staying above the five-billion mark and we have been fulfilling it,” Echegaray told journalists yesterday.