in a conversation with Channel Etributary Guillermo Pocci He cautioned about the real scope of the tax reform project that the government plans to send to Parliament and highlighted the political and technical challenges facing its implementation.
Tax reduction with no change in profits
Experts began by pointing out that at present,everything is above the government”, and the real debate will take place when the project enters Congress.All tax regulations are broadcast within Congress and must be entered by legislators.” he said.
As he explained, the official proposal would include the repeal of around 20 taxes, but clarified:I don’t think it’s a tax where collection is concentrated such as VAT, profits, checks etc.“Instead, he thought, what the executive branch is aiming for.”Reduce income tax impact on individuals by expanding deductions”.
but, Pocchi I warned you that you will need receipts and invoices for these deductions.Today, each invoice is registered so that it is documented and recognized by the Treasury.”, he noted, stressing that this measure could formalize parts of the economy.
“Super VAT” and the challenge of federal cooperation
One of the most debated points, the so-calledsuper value added taxA question arises.If we want to do something similar to VAT, we first need to amend the Federal Tax Burden Act.“The tax officer explained.
Recalling that the law prohibits the creation of similar taxes by localities, he said:New norms had been expected since the constitutional amendment in 1994, but they were never approved.“So that’s what he thought.”“VAT would be more complicated to fix than it would be beneficial because it would require agreement from all states.”
When asked about the possibility,tax competition” Pock said.Behind the competition is investment and development”, he said, but this phenomenon occurs both between countries and within Argentina.
Cash taxes and drop-in collections
Regarding the idea of applying taxes to cash, experts were blunt:Establishing a tax on cash will reward informality.“He argued that many people would prefer to execute trades outside the system.”People will say, “If you pay me in cash, I’ll admit you more,” and that will create money that will go out of the system and never come back.‘ he warned.
Regarding the drop in recovery rate from 3.5% to 4%, Pocchi He attributed the slump to the election backdrop and economic uncertainty, saying:People waited and tried to defend the capital. This slows down the economy and reduces the taxes generated.”.
Finally, a tributary said:Consumption and production are the first variables that need to be recovered” Achieve sustainable revitalization.
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