This Tuesday, the Executive Branch will send to Congress a project that, among other things, changes the name of Profits to the Personal Income Tax Law.
The new regulations will place
the minimum floor
at which the tax begins to be paid at $1.3 million gross per month, much less than the current floor of $2,340,000.
In relation to the current out-of-pocket income, it represents
, on average, a 25% reduction
in the net salary of
some 800,000 public and private sector workers
, regardless of the eventual deterioration due to higher inflation.
And another
100,000 who were still covered by Profits, by lowering the non-taxable minimum,
will pay much more.
The higher the income, in proportion, the greater the drop in the out-of-pocket salary would be.
Another change introduced by the new project is that
the scales will be updated quarterly
in line with inflation.
And the new project also authorizes
the delegation of powers to the Executive to update the amounts of the scales
.
Within the project, a name change is also contemplated: from Income Tax
to Personal Income Tax
.
In September 2023, a month before the general elections, the Minister of Economy, and then presidential candidate, Sergio Massa promoted a project to modify the Income Tax law which consisted, among other issues,
of eliminating the fourth category and, therefore, exempted some 700,000 employees
in a dependency relationship from payment.
This project was approved by 135 to 103 votes in Deputies and had, among others, the support of Javier Milei himself and his presidential running mate, Victoria Villarruel.
The project established that since January (that is, this month)
workers who earned less than $2,340,000 gross (15 SMVM) did not pay the tax and those who exceeded that figure paid less.
Therefore, if the official project is approved, some 800 thousand employees will pay Profits again and another
100,000 will pay more
.
In turn, under the current law in force, these 15 SMVM were adjusted in January according to the value of the minimum wage of that month in effect during the first half of the year.
And with the SMVM value for July, the second half of the year.
The scales will be updated quarterly in line with inflation.
The project presented also authorizes the delegation of powers to the Executive to update the amounts of the scales.
Who pays Profits today
The current minimum to pay Profits is 15 minimum wages.
In January,
it is equivalent to $2,340,000
The values are updated semiannually.
It is adjusted in January and July, each year.
S.N.