Lower House to debate cutting tax expenditure for 2024 budget

The budget commission will analyze suggestions made by the Economy Ministry, aiming for a 1% surplus in 2024

A pedestrian walks in front of the National Congress, as Argentines struggle amid rising inflation, in Buenos Aires, Argentina May 11, 2023. REUTERS/Agustin Marcarian

The Lower House’s budget commission will start debating an addendum to the 2024 budget bill on Wednesday which aims to eliminate a series of tax expenditures to reach a 1% surplus. 

Overall, tax expenditure is equivalent to 4.72% of Argentina’s gross domestic product (GDP). In a message from the Economy Ministry, the government highlighted certain costs and “tax benefits with a negative impact on the budget” amounting to 2.24% GDP, suggesting that the Lower House debate reducing those specific topics when addressing the budget.

“Approving laws to reduce tax expenditure would be a good way to strengthen the resources in the public sector, get more financing for the development of priority public policies and consolidate a robust primary surplus,” said the document, signed by Economy Minister Sergio Massa and Chief of Staff Agustín Rossi — presidential and vice presidential candidates for the ruling coalition Unión por la Patria (UxP) respectively.

On the cutting board are income tax breaks for judges, exporters with value-added tax (VAT) benefits, and an industrial development scheme in Tierra del Fuego province. With those reductions, the government aims to take the budget from a 0.9 deficit to a 1% surplus.

These tax benefits, differential systems, and budget subsidies “particularly favor large companies and corporations” and have “a significant negative impact on the sustainability of public accounts by creating permanent tax collection reductions,” the document says. 

“[The income tax break for judges] does not seem to be associated with a public policy that has a general social impact,” said the communiqué. “It harms equity, equality, and tax progressiveness relative to the rest of the employed taxpayers.”

On Tuesday, Economy Minister and presidential candidate Sergio Massa offered a press conference in which he promised to promote the budget surplus. The budget bill was presented by the economy minister on September 15, but deputies from different blocs agreed to start debating it in commissions following the October 22 general elections.


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