The Supreme Court has dealt a blow to the government, ruling that pensioners and retired people should not face income tax deductions and striking down the move as unconstitutional.
The ruling impacts hundreds of thousands of retirees who receive more than 62,462.22 pesos a month, the ceiling at which income tax payments begin.
The decision was handed down by majority rule, with the president of nation's highest tribunal, Carlos Rosenkrantz, dissenting as widely anticipated. Chief justices Ricardo Lorenzetti, Carlos Maqueda, Elena Highton de Nolasco and Horacio Rosatti all approved the ruling.
The ruling was based on a case brought by Entre Ríos retiree María Isabel García, who in 2015 launched a suit against the AFIP tax agency in order to have deductions on her pension payments ruled unconstitutional. The retiree had already won a series of rulings in her favour, including in Paraná and Entre Ríos provinces, prior to the nation's highest court taking it on.
Garcia, who was 79 years old when she launched the action, said she suffered from health problems and that deductions ranged from between 30 and 32 percent of the overall value.
In their ruling, the judges also argued that "no sum for income tax can be withheld from the claimant's retirement until the National Congress issues a law exempting retirees from this tax." They also highlighted the principles of equality and reasonableness in tax matters and said García's claim should be resolved on its "social nature."
The judges cited constitutional reform in 1994 that guaranteed "real equality of opportunities and treatment" in favour of the retired, which was identified as a "vulnerable group."
The court also ordered García be reimbursed for withholdings since the case began, almost four years ago.