In the last few hours, the Government has taken a measure that could be a double-edged sword. It is about the ssuspension of a benefit which allowed large and medium-sized importers Avoid paying VAT and income tax. The aim is to raise funding amid declining funding and the tussle with the IMF, but companies warn that the cost of finance and the prices of imported goods will rise.
The alarms were triggered this Wednesday after the publication of general resolution 5339/2023 of the AFIP, which suspended until 31 December 2023 the collection regime which importers exempt from paying VAT of 20% and 6% of profits. To access the “certificate of exclusion” companies had to show the accumulated credit balances and meet the requirements set by the institution.
Now, businessmen assure that they will face a higher tax burden and will pass it on to prices with increases of up to 16%, which will make imported goods and equipment more expensive. Today importers pay costs, insurance and freight (CIF), on which a tariff (12% on average) and a statistical fee (3%) are paid. And on that value (FOB, on the ship), VAT (21%), Gross Income (3%) and now the new perceptions (26%) are applied, even if some are advances.
Tax officer Cesar Litvin made a cost impact calculation. For example, a company that imported $1 million with an import dollar at $210 generated a $210 million deal. If receipts that companies didn’t have to pay earlier because they were excluded are applied to that import, a withholding tax of $42 million will be added for 20% sales tax and $12.6 million for 6% profits.for a total of $54.6 million.
The other key change is that while the new insights will be calculated as an advance on the respective taxes in the notarial deeds, the VAT will be calculated only starting from the ninth month following the customs clearance. Therefore, the payment made in March this year will only be considered in December, under a forthcoming government. With inflation of 6% per month, that balance will be $24 million in December, a 42% loss.
“Whoever was able to request the certificate is because they had a balance in favor, now that balance will increase and go evaporate month after monthbut it’s also an additional cost because I didn’t pay receipts before, this will have a financial and economic effect because with such high inflation it’s likely you’ll pass it on to prices, if you import and have to advance a tax and you can’t take it, there’s damage,” Litvin said.
The government has restricted imports and access to dollars since last year. And now it has added this measure amid the sharp decline in tax revenues due to the crisis, drought and the advance of exports. the bet is raise $1 billion, the equivalent of half a month’s worth of funding o 1 point of GDP that the next administration will not have and which is now essential to achieve the fiscal target with the IMF, they acknowledge in the official offices.
The UIA alerted this Thursday on the “collection” objective. of the decision and its impact on competitiveness. Against this backdrop, one importer estimated that for a $1 million import, $755,000 in duties and taxes will have to be paid, 40% of which is for new receipts. “In other words, for every import dollar, it takes 0.75 cents to nationalize the goods and you still haven’t taken them out of port,” the source explained.
For Carolina Albornoz, an analyst at Impuestos de Expansión Argentina, “the new law will make importers pay a tax which, following the sworn declarations, they did not have to pay, it is technically an illegal tax”. And she warned that “it will do nothing but companies continue to accumulate balances in favor which lose their value over time in times of high inflation like today.
Source: Clarin
