08/28/2020 - 6:00
- Clarín.com
- Economy
The Government is working on a tax reform that it plans to send to Congress in conjunction with the 2021 Budget project . With the intention of making the scheme more progressive, it evaluates two key changes in the Income tax : increasing the rate paid by individuals on the highest scale, and taking it from 35% to 41% , and eliminating some incentives they have today companies that reinvest, as published today by Clarín .
The economic team is working on defining these aspects, a project that still needs to be approved from a political point of view. But it occurs at a time when the Government needs to show fiscal prudence and move towards a scheme to balance public accounts, both out of conviction and because of the agreement that it is beginning to negotiate with the International Monetary Fund .
Income tax, both paid by individuals and companies, is one of the main sources of income for the State: with 22% of total tax collection, it represents almost a quarter of income. And it was also the reason for attempts at tax changes in recent years: from Axel Kicillof to Alfonso Prat-Gay , when they passed through the Palacio de Hacienda, they tried to modify it by expanding the range of the tax base.
But for analysts, given the high tax pressure, they see no scope for changes to the scheme to increase what taxpayers pay, unless a comprehensive reform is carried out.
Nadin Argañaraz , economist at Iaraf (Argentine Institute of Fiscal Analysis), the final result will depend on whether the increase in the aliquot to 41% that would be made to certain sectors ends up with a reduction in what average incomes pay.
He also pointed out that it will also be necessary to evaluate where the cut is made, that is, above what salaries end up facing that aliquot. "All this ends up defining whether the tax is made more progressive or not, and also how much is collected," he reasoned.
He mentioned that in recent years, earnings for people lost progressivity. "When you look at the scale of Chile, it is clear that the higher the income, the more tax contribution," he said.
That is why he assured that “if a reform is thought, it cannot be done from a partial point of view; you have to think about it in an integral way, between the nation, provinces and municipalities ” .
For César Litvin, CEO of Lisicki, Litvin & Asociados, "today there is no tolerance for new tax increases , less in a post-pandemic situation where it is necessary to give muscle mass to the economy."
According to him, a large part of the countries, in the middle of the pandemic, are reducing their taxes to give oxygen to the companies that were affected by the pandemic. “We are going in a different orientation. And also when the sacrifice that is being asked of the private sector is not accompanied by a sacrifice of the public sector ”, he added.
Asked by the countries where the aliquots in earnings for people are greater than the 35% that exists today in Argentina, he replied: “Although there are some that have aliquots that reach 50%, there is no tax pressure that exists in the Argentina ; they don't have such high VAT or consumption taxes, for example ”.
He stressed that Argentina has a very high tax burden taking into account two factors. On the one hand, there is about 50% informality in the country, so the effective burden is greater.
“Also, if we consider that inflation is a tax, and high inflation is important, it increases the tax burden even more. With such a heavy tax burden, it does not seem appropriate, beyond the need for income, "he added.
Under a progressive conception of the tax scheme, in which those with higher incomes should pay more taxes, economists specializing in the subject assess that Profits collects little compared to what it could precisely because the Argentine economy has a lot of informality, avoidance and evasion .
With a mobile scheme, the non-taxable minimum below which people do not pay Earnings is updated: since January, it must be faced by single workers whose monthly net salary exceeds $ 55,261 . In the case of married people , the payment threshold is $ 64,145 and for married people with two children it rises to $ 73,104 .
Regarding the "business leg" that the Government is evaluating to modify, Litvin explained that today the firms pay 30% of Profits, as long as they reinvest and do not distribute dividends. But if they do, it adds 7% on dividends. This is how he interprets that what they will try to do is bring the general rate to a level around 35%.