Argentina's Tax Take Set To Surpass ARS20bn

by Mary Swire, Tax-News.com, Hong Kong

29 April 2009

Argentina's April tax revenues will likely exceed ARS20bn (USD5.4bn) according to the country's tax director, Ricardo Echegaray.

Despite a major loss of income from falling export levies, Mr Echegaray has announced that Argentina is still on course to match the ARS20.24bn collected during the same period of last year - proving that economic growth is still sustainable during the current downturn.

Achieving such a total seemed unlikely in January, when tax revenue hit its lowest level since 2006. However, significant growth in February and March - which saw tax revenues jump by 23% - reversed the slump. Much of this increase though has been attributed to the nationalization of state pensions.

Although Echegaray has declared the tax collection to be acceptable in light of the economic crisis, the country's executive branch is still seeking permission from the government to raise taxes on a number of consumer items.

The executive has sent a bill to Congress, which, if approved would increase the taxes levied on items including laptops, cell phones, air conditioners, electric heaters and Global Positioning Systems. The move would also affect certain VAT exemptions, and would raise the cost of some luxury consumer items by as much as 50%.

According to the executive, the tax increases would compensate for the losses being made in other areas at present.

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