No matter how you look at it, back to front or front to back, right or wrong or right and wrong, the conclusion doesn’t change: The Omnibus Law marathon is above all a discussion about money, about a lot of money. Furthermore, it happens in a country that is not growing, which is actually regressing and where the resources that are generated are poorly distributed.
Thus, once the game was open, one of the first discussions between some governors and the Minister of the Interior, Guillermo Francos, was precisely on a proposal for the so-called Country Tax to be divided with the provinces, almost in half. We are talking about a creation that is the result of the critical shortage of dollars, relatives of shares, which tax the purchase of foreign currency for hoarding and the payment of expenses abroad with credit or debit cards at 30%.
The point is that even when the final destination of the funds is the ANSeS, the PAMI and the social housing works envisaged by the regulations, the money passes through the Treasury. and can be used, at least temporarily, for the expenses of the Nation until it ends up in its place. We are talking about safe silveroften fattened by devaluations that follow inflation.
In numbers for the year 2023, the collection of the Country Tax left 1.5 trillion pesos, an amount similar to that contributed by withholdings and half of the Check Tax. First-rate resources, which exceeded those of 2022 by a nominal 335% and, for the same reason, removed 124 percentage points from inflation of 211%. And in January they jumped an impressive 1,252%.
We then understand why President Javier Milei interrupted the debate as soon as it appeared, eliminated the fruit of discord from the Omnibus Law and left distribution as it was at the beginning: everything passes through the station of the National State.
WITHHOLDINGS AND MILES
Something similar happened with the increase in export withholding taxes on soybean byproducts, corn, wheat and meat, in addition to the fraud raised by the announcement. Behind the measure there is central information and, consequently, a mountain of unshared dollars, which point to 2024.
According to projections from specialized sources, this year there would be one increase in exports of the sector estimated at over 13,000 million dollars. The total bill would be around $32 billion and the loss caused by last year’s drought is expected to be made up. Furthermore, the increase in withholding taxes would bring an additional $1.6 billion to the nation.
Put like this and without calculating the effect of the super devaluation of the Milei, the equation means loss for the producers or loss of profit and pure and good income for the minister Luis Caputo. Obviously not a single word on the subject from the Casa Rosada, much less the word sharing.
In addition to the big picture, a report by specialist Nadin Argañaraz puts the January 2024 accounts into perspective, starting with the nominal drop of 213% that the shared transfers to the Provinces showed compared to January 2022. Taking into account 20% inflation, the nominal decline turns into a real decline of 11%.
The explanation falls clearly on the impact of the income tax reform imposed by candidate Sergio Massa and which has especially affected provincial resources and among these more than any other those of Buenos Aires. That meant a 38.8% serve that made January’s turnout the worst record in nine years.
If it still remains to be clarified, the turning point with the Massa reform and the improvement of the provincial accounts that the regularization will entail will have to wait for the resolution of some pending issues of the Omnibus Law. All this in a period that does not appear to be particularly favorable for taxes linked to economic activity: a drop of 2.8% was calculated by the IMF or recalculated, since a previous estimate also gave a negative 2.8%.
THE PROVINCES
Inevitable, in this novel of numbers the numbers follow each other. The interesting fact, if you will, is that numbers here mean a lot of money, sometimes power disputes and, of course, winners and losers.
The following figures belong to a type of fiscal repertoire that Kirchnerism has managed like no other. They are called “Discretionary Transfers”, they are resources that arise from the underestimation of inflation and are administered by the Casa Rosada according to the political interests of those in power. Contrary to what was expected, in this sector the province of Buenos Aires and Axel Kicillof reigned without competition between 2020 and 2023.
A clear example of the game occurs, precisely, in 2023, with the chained elections. For starters, the money that was in the till that year amounted to about 14.5 billion pesos and of that Kicillof received 43% of that package, or about 6 billion.
To better understand why specialists define these funds as discretionary, some comparative data from 2023 are useful: in the city of Buenos Aires 6.6% and in Chaco and Santa Fe 4.2% per capita.
To complete the picture, the inflation assumption used to define budget expenditure was 60% and real inflation rose to 211%. The difference was made up of extra-budgetary revenues that the government had available and managed as it pleased.
Now we have a similar case, starting with the contrast between the inflation that the 2023 Budget extends to 2024 and foresees in force at 69.5% and the 213% estimated by the studies that the Central Bank consults monthly. A similar case, or more or less similar, would be worth clarifying.
That’s exactly how it was in January this year “Discretionary transfers” decline by 98% in real terms, adjusted for inflation, compared to 2023 something which, according to Nadin Argañaraz, can be interpreted as a “virtual disappearance” of the story. That is, from an account that in 2023 amounted to 14.5 billion and in the four years K 29 billion.
Evidently wherever you look, those who do not fall within any distribution are pensioners despite their assets accumulating a real adjustment, i.e. a real loss, of 48% in the last six years. It should be noted that among so much noise, so much flag and so much billboard, nothing appears that sounds like a demand for pensioners and if the issue is those who have been deferred, here we are dealing with an infinite lack of protection.
Source: Clarin
