BUENOS AIRES–Argentina’s tax collection rose to a record in May but reflected a slight slowdown from the big gains seen in recent months.
Tax revenue in May was up 20.5% on the year at 61.03 billion pesos ($13.65 billion), the federal tax agency Afip reported Monday.
The gain was due «to the strength of the domestic market,» Treasury Secretary Juan Carlos Pezoa said at a press conference. Pezoa also ruled out the need to cut government spending.
While setting a new high mark, the year-on-year gain was lower than the 24.4% increase in April.
The tax take has swelled amid brisk economic growth and soaring inflation. Gross domestic product grew by 8.9% last year. But growth is expected to cool to a 6% annual rate this year, according to the central bank, an estimate private economists say is optimistic. Many economists are predicting flat growth or even a contraction this year.
In addition, most private-sector economists say inflation is rising at an annual rate of between 20% and 25%. That serves to fuel sharp gains in sales and other taxes.
Value-added taxes in May totaled ARS15.80 billion.
Despite the strong gain, there was a notable drop in the pace of increases in income tax revenue.
Income taxes in May totaled ARS14.88 billion, up just 6% on the year.
-Write to Shane Romig at shane.romig@dowjones.com
–Alberto Messer contributed to this article.
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Source: http://online.wsj.com