By 2023, a tax saving of $455 billion is expected due to the reduction of subsidies

The new tariff scheme provides for the phased removal of subsidies for electricity, grid natural gas and drinking water services. According to the head of the Ministry of Energy, Flavia Royón, the fiscal savings that will be derived from segmentation is $ 47,500 million for this year and $ 455,000 million for 2023, according to the impact of the gradual reduction of the State’s contribution to consumers.
“We estimate a tax saving of $47,500 for this year, which in the annualized total represents a total of $455,000 million by 2023,” said the Head of Energy.

Royón made the presentation of the gradual reduction of subsidies in a press conference that lasted for an hour and a half and was held in the Microcinema of the Palacio de Hacienda. The Secretary of Energy was accompanied by the Secretary of Finance, Raúl Rigo; the Undersecretary of Hydrocarbons, Federico Bernal; the Undersecretary of Electric Energy, Santiago Yanotti; the Undersecretary of Planning, Celicia Garibotti, and the head of Aysa, Malena Galmarini.

“Segmentation has been thought from a criterion of a distribution based on social justice and equity. Today 50% of the population with the highest income receives 60% of the subsidies,” said Royón.In turn, the head of the energy portfolio explained that “what is being proposed in this readjustment and updating of tariffs is that the subsidy really reaches those who need it most. In this policy families come first, it is a distributive policy with a social sense.” In this way, the subsidies will be readjusted and distributed to a greater extent to the lower income sectors, corresponding to the users of social tariff; and a gradual decrease will be applied in the middle sectors and a reduction for higher-income households. The tax savings due to the segmentation of tariffs implies, in the preliminary numbers, a cut that oscillates between “0.4/0.5%” of GDP by 2023, while for the remaining months this year “it will be a third” of the annual calculation, according to Raúl Rigo.

Original source in Spanish