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UPDATE 2-Argentina May tax revenue rises 20.5 pct to record
June 4, 2012 / 11:01 PM / 6 years ago

UPDATE 2-Argentina May tax revenue rises 20.5 pct to record

* Monthly tax take marks record but misses market view

* Tax agency head says VAT, social security levies lead gains

BUENOS AIRES, June 4 (Reuters) - Argentina’s May tax revenue rose 20.5 percent from a year earlier to a record 61.03 billion pesos ($13.64 billion), bolstered by consumer taxes and social security contributions, officials said on Monday.

Despite reaching a record high, May’s data came in below expectations for revenue of 63.40 billion pesos, according to the median forecast in a Reuters poll.

“Never before in Argentina have we collected 61.0 billion pesos. We’d barely passed the 50.0-billion mark. This marks a new floor and sets the standard for future revenue,” Ricardo Echegaray, head of the AFIP tax agency, told reporters.

He said social security contributions had shown the biggest year-on-year rise, climbing 32.5 percent.

Inflation estimated at between 20 percent and 25 percent a year is helping push tax revenue higher. The government’s discredited data puts inflation below 10 percent annually.

State spending growth cooled briefly after President Cristina Fernandez was re-elected in October but it has since shot upward again, outstripping revenue growth and eating into the primary budget surplus.

Overall growth in Latin America’s No. 3 economy has slowed in recent months although it is still expanding by almost 5 percent year-on-year.

The center-left government has imposed currency and import restrictions aimed at stemming capital flight and bolstering the trade surplus, a pillar of its economic policy.

But some analysts say these moves have hurt consumer and business confidence and also affected local industrial production by hindering the importation of key parts.

Last month, import duty revenue rose just 4.5 percent year-on-year while export levies grew by 23.6 percent, the AFIP said.

Receipts from value-added tax (VAT), which accounts for the biggest chunk of government revenue, increased 21.1 percent from May 2011 to 15.80 billion pesos.

Corporate and individual income tax revenue - the second-biggest contributor - grew 6.0 percent to 14.88 billion pesos.

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