Argentina's government has announced it will raise the income tax floor for workers to 500,000 pesos, starting Monday (May 1).
The Economy Ministry said in a statement that the floor would be subject to the formula it uses to classify workers wages and that the move would benefit around a quarter of a million employees “in a relationship of dependence.|
"With the new income tax floor, no income tax withholdings will apply when gross remuneration does not exceed 506,230 pesos, inclusive" per month, said the Economy Ministry’s release.
The portfolio headed by Sergio Massa said that when gross monthly remuneration exceeds 506,230 pesos and is less than or equal to $583,851, “withholding agents will compute an increased special deduction.”
The floor for ‘ganancias’ was set at 404,062 pesos back in January, with those earning under 466,017, subjected to a reduced rate,
"In this line, the proposal applicable from May 2023 is linked to the variation of the Average Taxable Remuneration of Stable Workers (RIPTE) of 25.29 percent between October 2022 and February 2023 (last data published)," added the Treasury.
The changing of the income tax floor comes with workers suffering from falling purchasing power amid runaway inflation. Consumer prices have increased by 104 percent over the last 12 months.
Massa is due to meet with business leaders on Tuesday, part of a packed schedule that includes meetings with Edesur energy firm and later, China's Gezhouba Group, for talks over the financing of construction for a dam in Santa Cruz Province.
As well as meeting with the directors of the Instituto del Desarrollo Empresarial Argentino (IDEA), the minister is set to announce details of a new US$380-mullion disbursement from multilateral lending agencies.