The Argentine Chamber of Commerce and Services (CAC) presented a “Provincial tax map on wholesale and retail trade: Gross income”, in which it details the evolution of the main revenue resource of the provinces and which accounts for an increase in the effective rates that tax commerce in the order of 40% average.
Regarding the current tax system, the president of the CAC, Natalio Grinmanpointed out that “there are different versions of the amount of taxes that Argentina has.”
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“There are 170 for some. For others, 160 or 180. The reality is that there are too many and only 9 or 10 of them concentrate more than 90% of national collection”, remarked the manager.
In this sense, Grinman declared that the rest of the taxes “are annoying not only for the businessman but also for the accounting firms that have to be updated every day with the changes that arise from new ordinances.”
“The one of Gross incomeWe have always said it, these are bad taxes. One of the worst that exists. A regressive tax where tax is paid upon tax upon tax,” he said.
Gross Income: what the CAC report says
The report from the Chamber of Commerce broke down the behavior of the tax over the last 13 years in both retail and wholesale businesses in the 24 provinces, with dissimilar results in each region.
One of the main conclusions of the tax research is that the implementation of the Fiscal Consensus at the end of 2017 during the government of Mauricio Macri It implied an increase in the average effective rate for the sector.
“This happened because maximum limits were set higher than the current rateswhich made it possible for several jurisdictions to raise their rates from the first year,” he points out.
At the same time, the report highlights that as of 2018, The average rate for the wholesale sector exceeded that for the retail sector“increasing in certain jurisdictions the pyramiding effect that characterizes the tax on Gross income“.
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Meanwhile, the treasurer of the CAC, Edgardo Phielippexplained that it is a tax type “waterfall“since “in all stages it adds tax” that varies between 2.5% and 5.5% depending on the province.
“In each value chain from the producer, to the wholesaler, to the distributor and to the retailer. All of them add Gross Income. So it is so that the total load exceeds 11% and in some cases reaches 15%depending on the extension of the value chain,” described the Commerce representative.
Lastly, the owner of lto the Tax Affairs Committee of the entity, Daniel Calzettaconcluded based on all the data analyzed that “In almost all cases they have been approaching 5%” and highlighted that the maximum rate that governs each province of the country was produced after the signing of the Fiscal Consensus.