After an extensive debate in the Budget Commission, the ruling party emerged this afternoon with the majority opinion of the fiscal reform package sent by the Government which contemplates, among other points, the reversal of the Income Tax for the fourth category. The objective of the libertarian bloc is to bring the ruling to the venue next Monday to give it a half-sanction, in conjunction with the new version of the Bases Law.
In addition to the Income Tax, the tax package also includes a spacious and generous money laundering not regularized; a new tax moratorium, a reduction in personal property tax and modifications in the billing ceilings provided for in the monotribute.
As happened with the opinion of the Bases Law, the Government agreed to modify several points of this initiative to bring closer positions with the dialogue opposition blocs and agree on a majority opinion. The strategy was relatively successful, since the blocks of the UCR, We Make the Federal Coalition and Federal Innovation signed it with dissidents.. Unión por la Patria (UxP) and the left blocs presented their own opinions rejecting the official project.
Deputy Carlos Heller (UxP) was in charge of detailing the objections to the official project. He was forceful in rejecting money laundering due to the broad and concessive conditions for entry. He questioned, for example, whether non-resident subjects, whatever their type, are allowed to launder their undeclared assets (except cash).
“This has serious implications regarding everything that has to do with money laundering,” he warned, while criticizing that the benefit also reaches “non-resident human persons who were Argentine tax residents, a new category that this project creates. ”. “It is clear that he has a first and last name,” he lashed out and alluded to the businessmen residing in Uruguay who support the Government.
He was also forceful in rejecting the reduction in the Personal Property Tax. “Plated in this way, it practically results in the elimination of this tax, which has historically been one of the most progressive in our tax system,” he said.
Among the most important points of the fiscal package are:
- Income Tax. The project reinstates this tax for the fourth category for those salaries greater than $1.8 million pesos for single workers and 2.2 million for married workers with two children. The Government intended that the update of these minimum floors would be annual but, in the face of opposition pressure, Casa Rosada officials agreed to have a quarterly update this year (it would be in September) and that, starting next year, it will be semiannual. . The billing ceilings will also be updated semi-annually in the different scales of the monotax regime.
- Money laundering. The project establishes that assets for up to US$100,000 will have a 0% rate, while higher amounts will pay increasing rates depending on the time they are received. In the first stage, which will last until September 30, 2024, the rate on the surplus will be 5%; in the second stage, until December 31, 2024, it will be 10%; and in the third, until March 31, 2025, 15%.
- Personal property. A strong reduction in this tax is established. The non-taxable minimum will rise from $11 to $100 million and the deduction for family housing will go from $56 to $350 million, which implies that the base of taxpayers reached will be reduced. These amounts will be adjusted each year based on the annual variation in inflation published by INDEC. Another benefit is the gradual reduction of the scale of progressive rates, eliminating the existing discrimination for goods located abroad. For fiscal year 2023, the maximum rate proposed is 1.5%, which will be gradually reduced until reaching 0.25% in 2027, below 0.75%. In addition, a special regime is created that allows payment to be advanced for 5 years (from 2023 to 2027) in an installment with a reduced rate of 0.45% per year for assets that exceed the non-taxable minimum, and subsequently it will be 0. .25% of the surplus until 2028.
- Monotribute. The project proposes an increase in both billing levels – with a maximum limit of $68 million annually – and the monthly fee to be paid. These increases range between 200 and 300%, depending on the category. Likewise, the billing limits for locations and services are expanded, with new categories for this segment, equal to that of the sale of furniture.
- Moratorium on non-regularized tax, customs and social security obligations. It will allow you to pay obligations due as of March 31, 2024 in up to 84 installments with various benefits such as the forgiveness of all fines and up to 70% of interest on balances owed, depending on the payment method.
The person who served as the reporting member of the ruling party was the deputy of Pro Germana Figueroa Casas, who defended the project. “Do we want to pay the inflation tax or do we want to have a more logical tax system?” he challenged and while he acknowledged that the text of the new fiscal package “is not ideal,” he noted that “it will be improved” with the Government’s commitment. to “advance in an integrated tax system.”
The legislator Sergio Palazzo (UxP), who is also the leader of the banking union, focused on the reimposition of the fourth category of Income Tax. He questioned the removal of exemptions from the tax, such as additional ones, productivity bonuses, food stamps or overtime. “It is fictitious to say that the tax base is $1.8 million because the worker loses the ability to deduct all these items from the tax,” he ruled.
Your block buddy Itai HagmanMeanwhile, he warned that these tax modifications aim to “modify the tax structure to make it more regressive” and provide “a strong tax relief for the richest sectors of the country if the tax moratorium, money laundering and the reduction in Personal Assets are added. ”.
“The report of the Congressional Budget Office about this project shows that what would be collected from the Income Tax would be 0.3 point of GDP for 2024 and 0.5 point of GDP for the following years, until 2027. However, the State would lose from collecting for Personal Assets it would be 0.3 point of GDP this year and 0.6 point of GDP in subsequent years. The result is neutral. So, a tax modification is not being made so that the State collects more and spends less. The objective is not even effective in terms of achieving fiscal balance,” he indicated.