Collection soars 37% while spending 55%

Tax collection

Argentine tax collection grew 37.4 per cent in August with respect to the same month of 2006, settling at ARG$17.87 billions. Despite robust growth of revenues from taxes, public spending is increasing at a faster pace, 55 per cent interannual, an all-time record for Argentine economy history.

In this way, Argentine Tax Revenue Agency (AFIP, in its Spanish acronym) has collected, between January and July, ARG$127.37 billions, 32.7 per cent more than on the same period of 2006.

According to official data, collection increase is mainly related to "revenues coming from V.A.T., Income Tax, Employer's Contribution and Current Account, which explain 74.4 per cent of total amount." Price hike has an impact on them.

The announcement was made after a meeting held in Government House among Argentine President Néstor Kirchner, Economy Minister Miguel Peirano and Tax Revenue Agency manager Alberto Abad. This information should have been released on Monday, but current administration postponed it for Tuesday.

Outstanding

Through a press release, Argentine Tax Revenue Agency stressed that expansion of collection from returns' net V.A.T. hit ARG$1.8 billions, 43.3 per cent more than twelve months ago, "mainly due to economic activity increase and improvement in tax payers' compliance." Inflation also has a strong impact. So, consumption, main economy growth driving force, would also be boosting tax income rise.

For its part, Income Tax added up ARG$955.9 millions in August, 33.4 per cent more than on the same month of 2006. "This is related to greater revenues thanks to advances by corporations and natural individuals affected by tax increase for 2006 taxable year," AFIP highlighted.

Moreover, Argentine Tax Revenue Agency pointed out that employer's contributions added up ARG$491.4 billions last month, 33.1 per cent more than in August 2006, "due to increase of registered employment as well as of taxable income," the report states.

Meanwhile, tax on checks offered the possibility of collecting ARG$358.8 millions, 35.7 per cent more than a year ago. Export withholdings brought ARG$287 millions, 20.8 per cent more than on the same month of 2006.