Tax revenue for July managed to stay above the inflation rate, driven by the strong growth of economic activity and by a significant volume of settlements from the agro-export sector carried out during the previous month, despite the substantial tax cuts implemented by the Government of Javier Milei.
Revenues from VAT, foreign trade, and formal employment showed increases, although some regulatory changes negatively affected the year-on-year comparison.
The Minister of Economy, Luis "Toto" Caputo, announced that July's tax revenue saw a real increase of 4.8% compared to the same month of the previous year. Among the categories that outperformed inflation are:
Foreign trade: +43.8% real year-on-year.
Income tax: +18% real year-on-year.
Current account revenues: +8.4% real year-on-year.
Social security contributions: +10% real year-on-year.
VAT: +1.0% real year-on-year.
Javier Milei, presidente de Argentina.
July's tax revenue
According to ARCA data, fiscal revenues from the three main sources—Internal Taxes administered by DGI, foreign trade taxes through Customs, and labor contributions managed by Anses—reached a total of $17 trillion in July.
This figure represents a nominal increase of 42.7% compared to the same month of the previous year. If the year-on-year inflation rate for June is taken as a reference, which was 39.4% (the month in which the DGI and Anses tax base is concentrated), the real increase was significant. When applying the estimated inflation for July, which is even lower, the 4.8% real increase highlighted by the Minister of Economy is obtained.
Among the factors that drove this growth was the end of a temporary benefit regarding export duties, which led to a higher settlement of foreign currency from the agro-export sector during the first half of the month. The Argentine Oil Industry Chamber (CIARA) and the Grain Exporters Center (CEC), responsible for 48% of the country's exports, reported that in July, companies in the sector brought in USD 4.102 billion, representing a 57% jump compared to July 2023 and a 10% increase over June.
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"July 2023 became the best month since records began (2002), as a result of the end of the reduction in export duties—Decree 38/23, which expired on June 30. Agro-exporters with sworn export sales declarations (DJVE) had to advance 95% of the value of each export contract and prepay export duties, as required by regulations," sector representatives explained.
Growth of economic activity
Regarding the general level of activity, the General Activity Index (IGA) prepared by Estudio Ferreres showed a year-on-year increase of 7.4% in June. Four sectors exceeded that average: Financial intermediation, Electricity, gas and water, Mining and quarries, and Commerce.
More moderate increases were also observed in Manufacturing, Construction, Real estate and rental, and the Transport and Communications sector. In contrast, Public Administration and Social and Health Services remained stable, while the agricultural sector experienced a 3.5% decline.
These performances were essential in explaining the real growth in taxes such as Income Tax, VAT, Check Tax, Fuel Transfers, and in the revenues received by Anses, thus contributing to a recovery of resources in broad segments of society.
