taxes, a controversial topic if any. The truth is that, with or without knowledge, thousands of Argentines are immersed in the tax reality on a daily basis. Any product they buy, or any service they provide, has a tax burden, whether hidden or obvious.
The reality is that the discussion does not go through the tax instruments themselves, because all countries rely on taxes to guarantee the basic functioning of certain aspects of the state. So, it is not about whether or not there are taxes, but how they work and how many there are.
professional look. It is important to know that, both on a daily and macro level, the management of regulations and tax issues is crossed by a public accountant. In this context, and speaking from experience, the activity of the professional is very dynamic and requires constant updating in order to provide correct advice. Currently, there are information bases that allow us to speed up the processing of operations and to be aware of the constant modifications. In this sense, the use of technological tools for the planning and simulation of different fiscal scenarios is key. However, it is key to bring up data and information that are often taken for granted, but that have a not so simple background.
The tax pressure in our country, considering the three levels of government, is close to 30% of GDP. There are different measurements that can be used to make comparisons, which include the effective tax pressure, the legal tax pressure, the tax pressure on families and companies, etc. In general terms, it can be affirmed that Argentina’s tax pressure is at high levels, especially considering its level of economic development.
It is often said, as a general consensus, that there are around 165 taxes in the country. This is a number that is handled based on some publications and serves as a reference to measure the complexity of the tax system, beyond the specific figure. In any case, the amount of taxes, rates and contributions largely obeys the federal system of government, where the Nation, the provinces and the municipalities have the power to establish taxes, with the corresponding limitations in each case. Therefore, it is an ever-changing quantification.
The change. It is for this reason that not only is a major reform required at the national level, but there must also be a similar process, harmonized and coordinated with the set of provinces and municipalities. This was the path that the 2017 Fiscal Consensus proposed to begin, when an important step towards the “normalization” of the tax system was initiated based on the fiscal reforms implemented. In fact, the consolidated tax pressure, which had reached its historical ceiling in 2015, reversed the upward trend that led it to increase by more than 10% in just over a decade, and by the end of 2019 it had been reduced by 3 % of GDP. The measures adopted by the current government went in the opposite direction, eroding this percentage reduction, and today we find ourselves back at the same starting point, with a reality that is even more complex to manage.
In this sense, and taking into account the importance of the subject, in October 2021 the UADE Tax Laboratory carried out a “Survey on the Argentine Tax System” focused on accountants and economic professionals. There, the opinion of 300 professionals on tax pressure, the structure of the tax system, and the effects of distortionary taxes, among other topics, was surveyed. It was concluded that 91% of the surveyed population considers the fiscal pressure high and 75% understands that there is an excessive preponderance of consumption taxes. Additionally, the majority considers that the most distorting tax is the Tax on Gross Income, followed by the Tax on Bank Credits and Debits. They also asked what measures could be adopted with a view to a reform: in this sense, the answers were that the elimination of distortive taxes and the promotion of investments are the main objectives for the definition of priorities.
In the world. It is also relevant to make an international comparison. With regard to developed countries, the fiscal pressure in our country is somewhat lower, since the average of the nations of the Organization for Economic Cooperation and Development (OECD) stands at 33.5% (preliminary 2020 ). Even in this case, and leaving aside the destination given to collection and the efficiency of spending, the tax structure in these countries is less regressive.
On the other hand, when comparing Argentina with the countries of our region that have a similar degree of development, we see that only Brazil has a similar level of pressure (31.6% of GDP), while others are clearly below our numeral. Indeed, we can cite the cases of Colombia (18.7%), Chile (16.3%) and Uruguay (26.6%).
recommendations. The possible solutions to this phenomenon are not simple, and require a lot of planning time. A comprehensive reform of the tax system requires, given the magnitude of the changes to be introduced, a series of basic conditions so that it can be implemented and produce the expected results: broad political consensus, orderly macroeconomics, coordination with the review of Public Expenditure and other policies. economic, social, labor, etc.
Some of the most relevant and priority guidelines that a future tax reform should consider are the following:
• Implement in the shortest possible time the measures originally provided for by the 2017 Tax Reform and the Tax Consensus (in terms of Earnings, Social Security, VAT, Tax on Bank Credits and Debits, Gross Income, Stamps, Real Estate Tax, Municipal Taxes, etc.).
• Achieve a new Federal Tax Sharing (in line with the provisions of the National Constitution and the Fiscal Consensus signed in 2017).
• Eliminate export duties.
• Reduce the general VAT rate, review its exemptions and integrate the residual Gross Income Tax (post implementation of the Fiscal Consensus).
• Harmonize and simplify the tax system at the federal, provincial and local levels
In this framework, we understand that the challenges we face as a society in the fiscal field are enormous and force us to be constantly updated in order to discern how to contribute efficiently with State resources in the midst of prevailing tax pressure and political-economic complexity. current.
-Andrés Edelstein is the Academic Director of the Public Accountant program at UADE.
-Aníbal Marinaro is Director of the Accounting and Tax Department of UADE.
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