According to the banks, 44% of the financial cost of a loan is due to taxes

Despite the high rates of an inflationary economy, what limits Argentines’ access to credit is the high tax burden on banking operations. This has alerted the Adeba nucleated banks, which have commissioned a study from the Mediterranean Foundation to analyze the obstacles that limit bankarization in the country.

Although the number of bank accounts per citizen among Argentines is high, If banking penetration is measured in terms of credit ratio per GDP, the country has the lowest in the region. In a technical note from the Chamber of Banks, the institutions warned that In Argentina, bank lending accounts for 10% of GDP, while the region’s average is 50%.

“A low bank grade means less credit for businesses and individuals, which in turn limits the production and consumption capacity of society, which leads to less economic growth and employment. The banking system receives a relatively small amount of deposits, which results in few loans and, therefore, the economy is limited in accessing bank credit, “the banks said.

To explain this phenomenon, entities with national capital, based on the work of the Fundación Mediterránea, have found two powerful reasons: on the one hand, the weakness of the currency and, on the other hand, the increasing level of taxes in the last two decades.

IERAL analyzed the situation of a borrower, who faces a Total Financial Cost influenced by the active interest rate, but also by other expenses associated with the transaction and fees that directly increase the cost of the loan. the cost of financing, such as VAT and tax on bank debts and credits, at the national level, gross income and stamp values ​​in the provinces, and the security and hygiene control rate in the municipalities.

For example, if a personal loan had an interest rate of 40% without taxes, when you add the taxes that burden it, the financial cost that the bank customer has to pay rises to 57%. These 17 percentage points of difference represent a 42% increase in the quota the customer faces.

“Fees represent on average 44% of what is paid when disbursing a loan, while the after-tax interest rate represents the remaining 56%. In other words, taking out loans, both for production and for consumption, is penalized and discouraged by the high tax burden of the Nation, Provinces and Municipalities “, warn the banks.

At the same time, based on the IERAL study, they showed that the burden of municipal and provincial taxes has grown steadily over the last ten years.

At the same time, Adeba, in collaboration with the German foundation Sparkasse, commissioned consultants D’Alessio Irol and Fundación Capital a “Study on access to bank credit for MSMEs in Argentina”.

The work shows that compared to other countries in the regionArgentine MiPymes have the largest tax burden in the CFT, which reaches 59.8% of the cost of acquiring a loan, while in Brazil it is 33%, in Mexico 26.3%, in Chile 19.2% and in Paraguay only 16.7%.

Javier Bolzico, president of ADEBA, said: “It is time to analyze how to reduce the burden that the Nation, Provinces and Municipalities impose on businesses and people who borrow and use financial services”. And he added: “Current tax levels are not compatible with a vigorous bank credit market and broad financial inclusion.”