Argentine companies pay the second highest tax rate in the world

The tax burden on Argentine companies is the second highest in the world, exceeded only by that which exists in the Comoros, a small African country made up of three islands in the Mozambique Channel. According to the data of the last report To do business (Doing business), a joint project of world Bank and the consultant PwC, the total rate of taxes and mandatory contributions that a local business must pay during its second year of activity is 106%, expressed as a percentage of your benefits.

In the whole world, only two countries have percentages above 100%: Argentina and the Comoros, which reach 219.6%. In neighboring countries, the percentages vary from 34% for Chile to 83.7% for Bolivia, from 65.1% in the case of Brazil.

The total tax rate measures the amount of taxes and mandatory contributions paid by businesses (after allowable deductions and exemptions) as part of commercial profits. This number provides a measure of the cost of all taxes that a company supports. The methodology takes into account all the taxes and contributions you have to pay (at the federal, regional and local levels), as well as any taxation affecting the commercial accounts. The main differences between countries are found in the labor charges and the Value Added Taxes.

And he gave some examples: the provinces collect gross revenue on sales and businesses pay a certain percentage of gross business volume; but at the same time, there are municipalities that charge the rate of hygiene, which It's also a percentage of the business bill located in this municipality.

In addition, when the company pays taxes, the national government charges a bank charge tax. "In Argentina, he has reached absurdity to have to pay a fee to pay taxes. A company pays twice on the same tax base, its sales plus tax on checks, to pay provincial tax and municipal tax, "said Cachanosky.

Since the state does not allow adjustment of balances to account for inflation, 35% of income tax is nominal and climbs to 45/50 % since the state collects taxes on non-existent profits, said the economist. In addition, he warned that this phenomenal tax burden at the national, provincial and municipal levels, scare investments because companies are looking to invest in countries with lower tax burdens.

Why does the percentage of the total tax rate of Argentina exceed 100%? The explanation is in the Inability of local businesses to adjust their balance sheets due to inflation.

"Congress is opposed to ensuring adjustments to account for inflation, while the average inflation in Argentina over the past 80 years, not to mention the hyper hyper of the 89's and 90, is 60% per year. If we do not take into account the actual effect of inflation on the badets and liabilities of the companies that earn nominal profits, they would lose. The World Bank report exposes one of the most serious anomalies for companies, namely the persistence of the tax on inflation, "he said. Daniel Sticco.

"The problem of taxes in Argentina is not its amount, but its composition and the very high level of fraud. The tax structure is characterized by an excessive weight of indirect taxes, which are regressive (proportionately more tax than the less imposing) and generally generate distortions, "he said. Marcelo Zlotogwiazda.

"While for the average OECD country, taxes on goods and services, such as VAT, account for 11% of revenues, they are responsible for almost half (47.8%) of revenues. It only takes into account that the AFIP perceives VAT more than twice the average of what it enters for this type of tax in the countries of the OECD ", he explained.

For its part, Luis Beldi alerted on a growing number of companies presented amparo resources to avoid paying taxes, produces distortion of not being able to adapt to inflation.

"Argentina presents an extremely complex situation: it must urgently reduce the tax burden on the private sector, while eliminating the budget deficit. The IMF echoed this dilemma in the last staff report high in the repertoire of the body. He raised the need to move to a new tax reform that reduces distortionary taxes. Proposes at the same time a series of actions to increase the taxable base of the collection ", badured Pablo Wende.

In other words, suggests the urgent need to go forward in the fight against tax evasion. Only in the case of VAT, it would collect an additional 3.7 points of GDP.

In the world of tax pressure on companies, Argentina is the second behind the Comoros, distant and unknown. With inflation levels, another sad record on a planetary scale.