Argentina Looks To VAT To Fund Corporate Tax Cuts

Recent reports indicate that Argentina is expected to comprehensively reform value-added tax (VAT) by removing several tax breaks and exemptions. Specific measures are expected to be tabled soon but it is anticipated that because of expected 10% cuts to the corporate income tax rate (bringing Argentina closer to regional competitors) VAT exemptions in the country will be cut to fund the cuts.

Organisation for Economic Co-operation and Development recommended in its June report that Argentina should introduce wide-ranging tax reforms, including reducing its corporate tax and broadening the value-added tax (VAT) base. It noted that “a complex and inefficient tax system is hampering productivity, investment and the competitiveness of firms.”

A shift away from direct taxes like corporation tax, on to indirect taxes like VAT and property taxes will seek to increase investment in the country, stimulating economic growth.

Also recommended by the OECD was a broadening of the personal income tax base which is currently only paid by 10% of the population.


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