An extremely complex system that Prioritizes obtaining resources from the community to maintain costs that do not meet a specific plan; Before achieving the goal of promoting economic activity and productivity growth. This explanation, which refers to the tax scheme of Argentina, is based on the findings of a report prepared by the Center for Tax Research, Faculty of Business, University of Australia. Beyond the reflection that comes from watching the “photo” (or film of recent years) of the moment. Research warns that there is no reason to be optimistic about what will happen.

As mentioned, for those who make political decisions There are several incentives to avoid taxes that are distorted but, at the same time, easy to collect and that have a significant share of total resources. All this despite the well-known fact of reality: a large part of the society is dissatisfied with the perception of high tax pressure and the rising rate of price increases, which adds to the effect of “inflation tax” in view of the losses. The value of the currency in which salaries and other income are accumulated.

What determines whether a country’s tax burden is high? What are taxes for in theory and how are resources diverted in practice? To what extent can the increase in the costs they intend to maintain be reduced? Where should change start? This may be the reason for the substantial debate on this topic.

The above report, prepared by economist and teacher Mauricio Groz, in collaboration with Ricardo Maidana, places Argentina. The level of tax collection is 29.9% of GDP, It is a few points lower than the OECD average (33.7%) and much higher than countries in the region such as Paraguay (13.8%), Peru (16.4%) or Chile (20.5%). Neighboring countries such as Uruguay and Brazil, with rates of 28.5% and 32.5%, are not too far from us (data are average for the period 2015-2019).

To determine whether tax pressure is high, “in general, the literature links indicators to a country’s economic development levels,” the report said. Whereas Argentina is a middle-income country, “The pressure level will be excessive”: They are not far from countries with high per capita GDP.

Fall rate

Research from the University of Australia includes The “efficiency index” of taxes, which was 3.4 points on a scale of 1 to 10 by 2020. This leads to the conclusion that Argentina has a tax system that “Partly achieves goals” on sufficiency and effectiveness and that it is on the verge of falling into the category of “not achieving its goals”. In 2005, the index was 4.8 points: at that time the country was quite close to the box of systems that “achieve the highest goals.”

To quantify this index, values ​​are assigned to certain variables, which in turn measure two aspects. ᲔThere is Adequacy of revenues against state liabilities; Here is the first bad note for Argentina that From 1994 to 2020, he had only one year, 2004, when tax collection exceeded spending levels. (However, obtaining resources from other sources also applies). The second aspect is Scheme efficiency; To evaluate it, for example, its complexity and design and maximum income tax rates are taken into account.

Why profit? Because “this is a tax that has the conditions to be considered one of the best because of its progressive nature and because profit taxation does not hinder the development of companies. [a diferencia de otros, cuyo diseño los aleja de ser un tributo que tenga en cuenta la capacidad contributiva)]”, Explains Groz in a dialogue with LA NACION. However, in the case of Argentina Inflation distorts tax bases, And in recent years there Different policies for making (or not doing) updates. This aspect, plus the regulatory differences over what income is taxed, makes it difficult to compare with other countries.

Design issue

Argentina’s tax collection has as The protagonists of a tax burden that aggravates goods and services (Such as VAT, which is considered to penalize sectors with regressively lower purchasing power): These taxes represent 52.2% of resources, Vs. the 32.7% share they have in OECD countries where the largest share (34.3%) is in income and profit taxes (such as profits).

On average in Latin America and the Caribbean, Income taxes also represent a more significant percentage of collection than in Argentina (27%, versus 18% in our country). On average in the region, property taxes are lower (3.8% vs. 9.1% in Argentina), as well as taxes on goods and services and contributions and social security contributions.

The amount collected for the latter concept, in Argentina, is 20% of the total, compared to 25.7% in OECD countries and 17.1% in the Latin American average. Here is a critical aspect for both the public sector and the public: the collection of contributions and contributions decreased from 2004 to 2020, and that fact. “Concerned about the sustainability of the pension and pension system” According to Groz.

Pension taxes, in any case, today stand at almost equal proportions with specific contributions coming from the world of work and common taxes. But in the context of fiscal deficit, Which does not turn off the warning lights already on, Especially when Half of the current workers (salaried and self-employed) are in the informal sector. When According to the Social Security Secretariat, 65% of the pensions paid by the Anses system were obtained under a moratorium. Of temporary effect (and for which funding was not provided) and not because its holders met the requirement of a 30-year contribution as soon as they reached retirement age.

An overview of how and what is spent This is what should be on the list of tasks to be accomplished if the goal is to improve the performance of the tax system, which in turn requires its own reform, which is difficult from a political point of view.

It is a paradigmatic case Gross incomeThe tax imposed by the Provinces and the Autonomous City of Buenos Aires and which is One of the most distorted Because it does not adequately measure the ability of individuals and companies to pay taxes, and because by accruing it, it accumulates costs at every stage of the production and marketing process, which ultimately “contributes” to inflation.

“They tried to do something with the whole income [para bajarlo], In fiscal agreements that lasted very little; “The reality is that the tax has become the heart of the collection of the provinces and no governor wants to give up resources.” In the previous administration, in 2017, the national government and local administrations (excluding San Luis) They signed an agreement that led, for five years, to cut rates and even abolish total revenue for some activities. But, already during the presidency of Alberto Fernandez there was a new pact with which That road was abandoned And allowed the tax burden to increase quite widely.

ასMasoba, Inflation allows the state to accumulate more in a devalued peso. “From an economic and social point of view, inflation is a major problem today because of its inequality. The reason is in the government’s policy, “said Groz, who believes that a way should be found to mitigate price increases in order to further improve the tax structure.

Difficulty

According to the report Ease of doing business World Bank, since 2014 In the ranking of the complexity of tax schemes, Argentina ranks 170th (or close to) among 190 countries. According to 2017 data, one component of this index has improved: the number of hours that companies have to devote to paying taxes each year. But that’s what Was mainly related to the incorporation of digital modalities, which developed all over the world, It was not enough to improve the position of our country.

This report shows the amounts payable by companies in the form of taxes They can exceed your trading profit. According to a study by the University of Australia, this is consistent with the diagnoses that “It reflects serious problems related to the informality of companies, tax evasion. In addition, it is one of the signs that the efficiency goal has not been achieved as it is too far from investment incentives.

Focused The so-called “storm” of profits, The government has focused on developing a new tax burden in recent weeks. “What is happening with this tribute seems to me to be very much in line with the findings of our report,” Groz said. “The system has become mining, it is looking for resources to keep costs down, without a plan for how we can produce more to grow and grow a pie that needs to be done.”