Avoid inflationary pressures, the government has postponed the tax increase on fuel shipments. There are two taxes – the liquid fuel tax and the carbon tax – which should be updated every three months, at the rate of inflation. But it’s not being done. According to the consultancy Economía & Energía -led by Nicolás Arceo- 1.8 billion dollars in revenues were discharged for this concept in 2022. And another 585 million dollars will stop being collected between January and March. Total, $2,385 million.
By decree dated December 30, the government postponed updates to fuel taxes corresponding to the third and fourth quarters of 2021, plus the whole of 2022. It is assumed that these increases will be applied from April 1, 2023, according to the official letter. In case you need to update, cumulative inflation is 140%.
“In order to avoid further pressure on fuel prices at the pump, the updates were subsequently postponed,” Arceo points out in a report. The economist was Vice President of Administration and Finance at YPF. Between 2020 and 2021 the failure to update caused that too 720 million dollars is not collected from taxes.
“The postponement of the increases in the amounts of the Icl and CO2 has led to a significant loss of tax collection in recent years,” Arceo explains in a note. “If during the current year the increases are postponed again, the widening of the gap between the theoretical value of the tax and that actually applied will lead to a loss of collection even higher than that which occurred in 2022”, he warns.
In January 2021, fuel and carbon taxes reached $15.3 per liter for diesel and $11.3 for diesel. Two years later, these taxes bite at $21.8 for every gallon of gasoline and $13.8 for diesel. In terms of real and constant pesos – that is, counting the inflation accumulated over the period – taxes are -now- $7.3 on gasoline and $5.3 on diesel.
«For the projection of the fiscal values between January and March 2023, at constant pesos, the projection of the CPI according to the Central Bank’s Market Expectations surveys is considered», Arceo points out. Fuel prices at the pump from January to March were estimated on the basis of the agreement signed between the industry and the Ministry of Energy. There had already been a 4% increase in December and another 4% in January. Another 4% is missing in February and 3.8% in March. Supersell gasoline for around $163, diesel for $183, “premium” gasoline for $200, and premium diesel for $283. Depends on flag and location.
The fuels they have a weight of 4.2% in the consumer price index (CPI). However, its increase also leads to higher logistics costs for companies, which have to pay more for the transport of their goods. In this sense, the indirect impact is greater.
The tax delay is a little more recent. “At the beginning of 2021, the tax amounts had been aligned with the provisions of the legislation. However, its application has been postponed since the second quarter of the year”, Arceo describes.
Two years ago, taxes accounted for a 20% of the premium petrol price. Now I’m 12%. Taking this period as well, the weight of taxes went from 17% to 10% on premium gasoline. In the diesel varieties, the tax burden was between 13% and 16%, and now it goes from 6% to 7%.
“To estimate the loss of collection, the amounts of the Tax on Liquid Fuels (IC) and on Carbon (CO2) published by AFIP for each month are considered, from which the theoretical cut with biofuels (not taxed) is discounted, the sales of petrol in the south of the country (exempt zone) and diesel sales in the south (with an amount differentiated by the LCI), multiplied by the total sales volume of petrol and diesel (excluding power plants, petrochemicals and international bunkers)” , Arceo points out on the methodology of his calculations.
“However, it should be clarified that the theoretical amounts of the collection do not coincide with the amounts of the collection of fuel taxes declared by the AFIP”, explains E&E in this own work, based on the AFIP and the Ministry of Energy.
Source: Clarin
