After the strong increase at the pumps since December, the price of gasoline could rise up to 11% from Thursday due to the liquid fuel tax (ICL) update. The government has started to evaluate this measure to add revenue and compensate for the blockade of the tax reform envisaged by the omnibus law.
According to oil industry calculations, the tax in question It has not been updated since July 2021, which would have generated a accumulated delay of 377%. Alberto Fernández’s government decided to freeze it in a context of accelerating inflation, a measure then extended by the Minister of Economy, Sergio Massa, a few days before the second round of elections.
Now, the expectation in the industry is that there will be an adjustment to the tax on liquid fuels and carbon dioxide, which could be reflected in an 11% increase in pumps from Thursday, when the freeze extension ordered by Massa expires. In this case, the liter of super petrol it would go from $699 to $775, while the value of the prize would rise from $862 to $956.
Since December, Javier Milei’s government has launched a shock plan, starting with a 55% devaluation and the “liberation of prices”, including fuel. AS, Since November, gasoline has increased by 140%which impacted the pockets and caused a decline in sales of the fluid by 20% since the beginning of the year.
During the electoral campaign, Milei had promised that before increasing taxes he would “cut off an arm” and that the adjustment of public spending would fall on the political “caste”. However, difficulties in reaching zero deficit first led to a tax increase being incorporated into the omnibus law and now, after the failure of that strategy, increasing the fuel tax has begun to be considered.
The former Minister of Economy, Nicolás Dujovne, assured on Sunday that “it is very important that the Economy shows how it will replace the resources that it will eventually lose due to the fiscal chapter of the law” and explained that the “Recycling and Moratorium do not generate very short term, “What was ALREADY adding up for the Nation were withholdings (0.5% of GDP) and profits (0.4% of GDP).”
However, the economist estimates that this loss of resources, amounting to 0.9% of GDP, can be recover with the fuel tax, which today collects 0.4% of the national GDP, and with the Country Tax, whose rate is 17.5% and the Executive has the power to increase it. “All that is lost can be recovered,” she explained via the X network.
For the director of the IARAF, Nadín Argañaraz, if the government updated the fuel tax based on the accumulated delay, the price of petrol could increase by 25%. According to their calculations, the monthly harvest decreased by 77% due to the freeze. And if it were adjusted, the country could collect additional resources for 0.37% of GDP and the provinces for 0.15%.
The fuel tax was established by law in 1998 and was established during the government of Mauricio Macri It has been updated quarterly, adjusted for CPI inflation.only to postpone it to 2019 and be frozen from 2021. Now, its possible thawing would add further pressure to inflation, which in January would have been around 20%.
Fuel represents 20% of the shipping cost and, in turn, implies a tax burden of just over 50%, so an increase in the tax will have an impact on the bus fare. On the other hand, the weight that fuels have in the consumer price index at a national level is around 4%, so much so that for every 10 points increase in petrol, the consumer price index tends to rise by 0 .4%, according to Ecolatina.
Source: Clarin
