Economy Minister Luis Caputo has confirmed that the so-called ‘Impuesto PAÍS’ import levy will be cut 10 points as from next Monday for the import of goods and freight.
The switch will not apply for dollars purchased for saving purposes or spent on tourism abroad, said Caputo.
“Important! As from Monday September 2 the PAÍS tax for the import of goods and freight will be reduced from 17.5 percent to 7.5 percent. A promise kept!” published the minister in his X social account on Tuesday night.
Caputo’s decision shoots down commentaries suggesting the move had been postponed until later in the month.
At the start of this message Caputo excluded from the benefit tourist packages and the purchase of dollars for saving purposes up to an official cap of US$200. This exclusion also extends to credit card spending in dollars, payment of platforms for streaming, services contracted abroad, the purchase of bonds and dollars for the transfer of dividends, among other purposes.
While Caputo announced the reduction, President Javier Milei anticipated that the levy – introduced by former president Alberto Fernández – would be fully eliminated at the start of 2025, as already contemplated in the bill for next year’s budget.
In the first seven months of the year, the PAÍS tax netted 4.2 trillion pesos, including 698 million pesos last month. This dip in revenue will be compensated by the income tax increases for wage-earners.
Cost to coffers?
According to a study by the Instituto Argentino de Análisis Fiscal (IARAF) think tank, directed by Nadin Argañaraz, “the fiscal adjustment of the first seven months of the year was equivalent, in annual terms, to 5.3 percentage points of Gross Domestic Product, i.e. 0.9 percentage points above the 4.4 points necessary to eliminate the fiscal deficit.”
This would give the government margin to make this cut and maintain its accounts without deficit, he argued.
The government would relinquish between 730 billion and a trillion pesos by the end of the year as a consequence of the reduction of the País tax, according to the economist’s estimates.
“It would have a cost of between 0.13 and 0.18 percent of GDP, which would be equivalent to between 730 billion and a trillion pesos,” said Argañaraz in remarks reported by the Noticias Argentinas news agency. This would imply that the monthly tax revenue would fall between 170 and 250 billion pesos.
Confirming that savings and tourist dollars would not benefit in a Radio Rivadavia interview, Caputo said: “What we had increased from 7.5 to 17.5 percent, we are lowering. It was to gain negotiating room and show we could balance the budget on our own.”
The cut thus extends only to the import of goods (not services) and freight.
Caputo explained to NA that the tax cut would be compensated by the extra revenue from income tax and the tax moratoria.
– TIMES/NA
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