Federal Administration tax revenue decreased 5.6% during the first quarter 2001, and social security contributions dropped by 5,7% compared with the previous year.

The 7.7% increase recorded in income tax collection is due to the changes recorded in two of the withholding regimes of this tax (1) and an increase in the number of prepayments by natural persons, also resulting from the tax reform current as of the beginning of the previous year. However, this positive trend was offset by a decrease in the amounts paid for company prepayments and tax returns, and withholdings (2), as well as a fall in revenue from easy terms(3).

VAT revenue net of reimbursements to exporters fell by 5.9%. This was due to a fall in economic activity, a likely increase in failure to comply with tax obligations, an increase in reimbursements to exporters and a decline in revenue from easy terms. A reduction in the use of the ‘Plan Canje’ car bonds and past due revenue paid in during January offset the variation somewhat.

Revenue from excise taxes increased by 19.9%, as a result of an increase in proceeds from the cigarette tax, due to an increase in the tax base(4), and to extraordinary proceeds resulting from the current agreement with the tobacco industry. The increase was also due to the growth in proceeds from the remaining excise taxes as a result of the tax reform implemented at the beginning of year 2000(5).

Revenue from import duties fell by 12.2%, as a result of a reduction of several tariffs during the previous year and a reduction in the level of imports.

Proceeds from the Fuels taxes fell 4.0%, due to a reduction in taxed sales, mainly petrol. Issues related to the payment mechanism of this tax had a positive effect.

Revenue from the Personal Chattels Tax showed an increase of 54.6%; due to the increase in the aliquot from 0.50% to 0.75% for all taxpayers whose total assets exceed 200.000 pesos (net of the minimum exempt).

The increase recorded in proceeds from taxes on Minimum Earnings is mainly due to an increase in revenue from easy terms.

Proceeds from Interest Paid fell by 29.5%, which was due to a reduction in the aliquot current as of January 2001(6).

The reduction of the aliquot resulted in a fall of 28.4% in proceeds from the Additional Tax on cigarettes(7).

Social security contributions were 5.7% lower than for the same period the previous year. This fall resulted from a lower distribution of proceeds from easy payments regimes, the reduction of salaries in the federal public sector, a reduction in the number of contributors to the pay-as-you-go system(8) and a fall in the number of self-employed taxpayers. This was partially offset by an increase in transfers to the "Fondo Solidario de Redistribución" and the modifications to the distribution of the Simplified Regime for Small Taxpayers(9).

Moreover, the decline in Other Current Resources is due to the effect in year 2000 of the input of cash from the Fiduciary Fund for Provincial Development, offset partially by revenue in year 2001 from the extension of the concession of the "Loma La Lata – Sierra Barrosa" mine (Decree 1252/2000).