Argentina agrees to exempt from income tax for 93% of workers

Originally published in Brazil current network

About 93% of workers will not have to pay income tax in Argentina after the Senate approves an increase in the exemption line to 150,000 pesos per month (about 9,000 Rials). This measure will benefit at least 1.2 million wage earners and retirees. Almost all of the Senators – 66 votes in favor, and only one abstained – agreed with the proposal. The House of Representatives approved it by a large majority, with only three abstentions.

The decision, according to the newspaper Page 12It is part of a plan to create a new financial aid. Emergency Household Income (IFE, for short in Spanish) interacts with the economic hardships posed by the COVID-19 pandemic. One of the consequences of the health crisis, which has exacerbated the economic crisis it inherited from the government of Mauricio Macri, the current president, Alberto Fernandez, is that poverty affects about 42% of Argentines. To give you an idea, a wage earner with a total monthly income of 120,000 pesos (7.3,000 R $) pays 3,200,000 tax a month (195 R $). Now it is exempt. The new law will take effect retroactively until January 1, and the government will compensate what has already been indicted in April. The fiscal impact should be between 34 and 47 billion pesos, about 2 billion Brazilian reals and 2.9 billion Brazilian reals.

Correct path

Another feature of the adopted measure is that it highlights the reversal of tax logic, which began in December with the passage of an exceptional wealth tax, which was approved. Also, with the aim of mitigating the economic impacts exacerbated by the epidemic, Alberto Fernandez’s government has been able to approve a project that hopes to raise nearly 308 billion pesos, or about $ 4.5 billion, and impose taxes on just 0.02% of the population.

Now, the main goal is to start to restore the purchasing power of wages as well to warm the economy. When we left government in 2015, there were 1.1 million workers who contributed to the revenue. Macri (Mauricio Macri, former president) campaigned saying (workers) would not pay taxes and ended up doubling the number to 2.3 million. With this bill, we want to correct the harsh blow that Macri has dealt into workers’ pockets Page 12 Jose Mayans. The senator chairs the Todos Front, a bloc that supports President Alberto Fernandez.

In addition to increasing the income tax exemption line in Argentina, until September the law maintains an exemption for health workers on duty and overtime. Nursery expenses for children up to three years old are deductible, up to an annual maximum of 67,000 pesos (approximately 4,000 Rials). The discount for children with disabilities will be doubled – today it is 78,833 pesos a year (about 4,820 Rials) – and the age limit is canceled. Discount is also allowed for purchasing school supplies or for a partner.