This revenue may be analysed as follows:—
The group of direct taxes is formed by the land-tax of the city of Buenos Ayres and of the National Territories, which figures in the balance-sheet as a sum of £320,320. In reality the product of this tax is greater—amounting to more than £616,000—but the nation is by law compelled to give a certain proportion of this sum to the Municipality and another to the National Council of Education; what remains when these obligations are satisfied belongs to the Government. The commercial and industrial licences of the Federal capital and the National Territories form the second class of direct taxes, their yield being £245,520; but, as in the case of the land tax, the Government has to give part of this sum to the city and part to the Council of Education.
The indirect taxes are those which produce the largest yield: they include the customs duties upon imports, which in 1908 yielded £12,036,000. The consular duties brought in £100,000; stamps and fees accounted for £118,000.
Besides the resources furnished by the indirect imposts of the customs, there has since 1891 existed in the Argentine another kind of indirect internal duty, which is charged upon consumption, and which every day acquires a greater importance, in proportion as the country is developed and as wealth and population increase.
These duties were established at a critical moment of the country’s history, and they mark a degree of evolution in the financial system of the country. In 1891, when the liquidation commenced of the great financial crisis which had completely overturned the economic organisation of the Argentine, the strength of the country was broken, the Treasury was empty, and there existed a public debt which was all the more grievous in that the paper currency was absolutely inconvertible, and decreased in value daily, in the midst of all the difficulties which characterised that terrible time.[98]
[98] See Memoria del Ministerio de Hacienda, 1890, p. 72.
This overwhelming situation resulted in the establishment of indirect internal imposts; that is, the branch of taxation which is levied on the national industry and national production; but which is, in all contemporary nations, one of the most fruitful sources of revenue; the more so as its collection demands few sacrifices on the part of those who pay it.
The realisation of this fortunate idea, which effected an important innovation in the revenue system, was due to the administration of Señor Carlos Pellegrini, in which Vincent-Fidel Lopez was Minister of Finance, and was perhaps the most important and meritorious act of the administration.
During this first year of 1891, the receipts furnished by this branch of taxation did not attain to the expected results; they amounted only to £224,682, distributed as follows: Alcohols, £123,511; beer, £23,549; matches, £76,617; banks and companies, £982; total, £224,660. Out of a total collection of $75,501,077 paper and $497,120 gold, or £6,743,518, the yield of internal duties amounted only to 3.29 per cent. Four years later, after the administration of internal duties had undergone considerable modifications and improvements, so that the system of collection had become more exact, these imposts furnished the Treasury with £676,946, which out of
a total collection of $29,805,651 in gold and $28,958,460 in paper, or £11,571,076, amounted to 5·85 per cent. of the whole.