Argentina July 2026 fiscal transfers plunge as tax revenue rises

In July 2026 the Argentine government sharply cut discretionary transfers to the provinces, recording a 68.6% real year‑on‑year decline – the lowest July level since 2005 – and a cumulative 62.8% drop for the first seven months of the year. Total discretionary payments amounted to $98.6 billion, with the largest shares going to the universal extended workday program, Treasury contributions and provincial pension boxes. Payments were heavily concentrated in Buenos Aires (19.5% of the total), La Pampa and Santa Fe, while several provinces received less than 0.3% of the total.

At the same time, automatic coparticipation transfers rose 7.5% real to $7.25 trillion, driven mainly by the Federal Tax Sharing system. The income‑tax component (Impuesto a las Ganancias) grew 19.9% real, offsetting a marginal 0.1% fall in VAT. Provinces such as Catamarca, Salta, Tierra del Fuego and San Luis posted the strongest gains, whereas Buenos Aires and Tucumán saw the smallest increases.

National tax collection for July reached $22.97 trillion, a nominal 35.1% rise year‑on‑year and a modest 1.2% real increase after inflation. The surge was largely due to a calendar shift that moved the payment of income‑tax returns to July, boosting that tax by 23.4% real. VAT showed a slight stabilization, while import duties fell sharply. Over the January‑July period, total revenue remains down about 4.6% real, dragged by declines in agricultural retentions and import tariffs.