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ECONOMY | 13-02-2021 10:23

Massa seeks to lower income tax floor

The government stands to lose some 40,000 billion pesos in revenue from these changes but hopes to recover much of this from the beneficiaries spending this extra money on items subject to IVA value-added taxation and other levies.

At the start of the week Lower House Speaker Sergio Massa submitted a bill raising the income tax floor to 150,000 pesos for salaries and 152,282 (or the equivalent of eight minimum pensions) for workers and pensioners respectively (gross earnings in both cases), thus offering tax relief to some 1.267 million people.

A further 102,741 people grossing between 150,000 and 173,000 pesos will still be liable but pay less, thus leaving 733,000 employees and pensioners above the level of a monthly 173,000 pesos who will draw no benefit from this bill.

Last year some 2.3 million people or around a quarter of the workforce paid income tax.

Until now the income tax floor for single workers has been a net monthly wage of 74,810 pesos and 98,963 pesos for married workers with two children, following the deduction of pension and social security contributions, while pensioners become liable if their retirement benefits exceed six minimum pensions (i.e. 114,212 pesos).

The government stands to lose some 40,000 billion pesos in revenue from these changes but hopes to recover much of this from the beneficiaries spending this extra money on items subject to IVA value-added taxation and other levies.

Breaking down the 1.267 million beneficiaries by province, over half live in Buenos Aires (569,000 in the Province and 158,000 in the City), 103,000 in Córdoba, 98,000 in Santa Fe, 30,000 in Tucumán, etc.

Massa’s bill can look forward to rapid passage since it is welcomed by the Juntos por el Cambio opposition although some of its deputies have said that they would like a closer look at the details while in the government benches some adherents of the La Cámpora faction are reportedly disappointed that Massa should be taking the credit for this idea rather than Frente de Todos lower house caucus leader Máximo Kirchner. Trade unions have already applauded the initiative.

– TIMES

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