Profits grew 4.2% in 2012, which is good news compared to falling revenues from the past few years. But it was a Pyrrhic victory for the Ministry of Finance thanks to the breather that it got after learning that the economy contracted two tenths of a point less than the -1.3% growth that the government had predicted.
The partial pay program worked for Sociedades, which increased revenues by increasing the personal income tax and the VAT, both compensating for the tax amnesty program's failure. 2013 will be more complicated yet. Without margins for new tax hikes, it is questionable whether a recovery can begin before the year ends. The only hope is to raise the deficit goal. It remains to be seen what really happened with 2012 spending. In a few days we will find out how far away from 6.3% we are.
