The Minister of Economy and candidate of Unión por la Patria (UxP), Sergio Massa, defines the latest details of the project to modify some conditions on the Income Tax, which will be announced in the next few hours.
The document, to which TN had access, has six axes that foresee that a group of workers and retirees will stop paying the tax. Meanwhile, directors of public limited companies, CEOs and managers will be reached.
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On the one hand, the head of the Treasury Palace would update the floor starting in October among those who pay the tax to $1,500,000 through a Decree of Necessity and Urgency (DNU). On the other hand, he will send to Congress a project to “simplify” the Income Tax.
The main changes that Massa will announce regarding Income Tax
According to Economy calculations, the evolution of the number of workers and retirees withheld in Income Tax and the ratio with respect to the total employees in a dependency relationship registered throughout the country is located at 7%, the lowest since 2003. The projection with the salary increases to December 2023 is 890,000 withheld in the tax. Workers and retirees in the fourth category will stop paying the Income Tax. Only directors of public limited companies, CEOs, managers and assistant managers will be covered, and privilege pensions will involve a smaller percentage of the total employees in a dependency relationship throughout the country. The proposal for those who are part to stop paying profits The fourth category requires a law, since in addition to being a tax matter, it is an “annual” fiscal year tax. It should take effect as of January 1, 2024. However, a “bridge” scheme with similar benefits will be implemented starting with the October salaries of this year.
Massa receives unions and deputies to define changes in the Income Tax. (Photo: Ministry of Economy)
The percentage of employees by economic activity that will benefit: Manufacturing industry (19.13%); Defense, Security, Public Education and Public Administration (14.50%); Financial intermediation and insurance services (11.94%); Communications (7.84%); Transportation and storage services (7.74%); Private education (6.33%); Wholesale and retail trade (5.82%); Exploitation of mines and quarries (5.82%); Service provision (8.10%); Supply of electricity, gas, water and sewage (5.06%); Construction (3.11%); Human health and social services (2.91%); Accommodation services and food services (0.90%); Agriculture, livestock, hunting, forestry and fishing (0.65%), and other activities (0.20%). An example of the improvements in the net “pocket” salary for workers. Until now, if an employee has a gross salary of $800,000, social charges ($132,001.31) and Profits ($117,690.32) are deducted and he receives a net salary of $550,308.36, thus the impact of Profits on the salary is 17.6%. As of the modification, the new out-of-pocket salary would be $667,998.69, with an improvement of 21.4%.