MercoPress. South Atlantic News Agency

Argentine Senate passes Income Tax reform with all votes but one

An income of 150,000 to 173,000 pesos in Argentina is for a privileged few, said Senator Naidenoff.

Argentina's Upper House Thursday passed by 66 votes in favour and one abstention the tax reforms proposed by the government of President Alberto Fernández, which would rid workers with a monthly gross income of 150,000 pesos (around 1,100 US dollars at the unofficial exchange rate) of paying the income tax.

The only abstention came from Senator Esteban Bullrich of the opposing Juntos por el Cambio (JxC) coalition of former President Mauricio Macri.
Workers who earn between 150 thousand and 173 thousand will pay the tax, but the AFIP (tax bureau) will establish deductions to avoid large differences between those who must pay and those who are exempt, the new law establishes.

The new threshold is to be updated as per a salary variation index released by the Social Security Secretariat.

The Lower House's last-minute changes included a provision whereby former president and vice president pensions are to fall under the income tax's scope.

The changes are effective retroactively as of January 1 this year so all deductions already made under the previous legislation are to be returned.

Bonus salaries of up to 150,000 will also be tax-exempt, as will overtime pays to health care workers involved in the anti-coronavirus efforts.

Daycare expenses for children up to three years old will not pay earnings up to an annual limit of 67 thousand pesos. Likewise, the exemption for disabled daughter or son is doubled, which is currently 78,833 pesos, and the age limit is lifted.

Productive bonuses up to a cap of 40% of profit and overtime of waste collectors are also exempt from the tax.

Another benefit included in the project is that educational tools are tax-deductible

Minority Leader Luis Naidenoff said the bill “does not touch ordinary people, it reaches only a few,” because “an income of 150,000 to 173,000 in Argentina, unfortunately, is a privileged income.”

Other reforms on the so-called Monotax are expected to bring some relief to those self-employed.