Less than 1% of taxpayers have to pay the tax; Opposition says measure is ‘irresponsible’ and ‘electoral’
The income tax reform proposed by Argentine Economy Minister and presidential candidate Sergio Massa (Unión por la Patria) was approved by the Argentine Congress on Tuesday (September 19, 2023). The text received 135 yes votes and 103 no votes. He had the support of Javier Milei (La Libertad Avanza) Massa’s rival in the election, from the left and minority blocs.
The project submitted by Massa aims to tax only income above 1.7 million pesos (about R$23,971 at the current rate). With the change, 90,000 taxpayers across the country will have to pay the tax, which is less than 1% of the total number of workers, retirees and retirees.
According to the government, the measure will impose fiscal costs of around $1 billion per year, which will have to be offset with other taxes and eventual growth in income and consumption.
The chairman of the budget committee and rapporteur of the proposal, MP Carlos Heller, rejected that it was a ballot measure, as the opposition stressed. For Heller, the change will mitigate the impact of the peso’s devaluation against the dollar.
In his speech, Milei said he agreed with “any initiative that consists of reducing taxes.” He defined the state as “a violent criminal organization that thrives on a coercive source of revenue called taxes, and therefore taxes are theft.”
Patricia Bullrich (Juntos por el Cambio), already a former security minister and candidate for Casa Rosada, was against the project, which she classified as “electoral” and “irresponsible”. He said the measure will further increase the Argentine economy’s deficit, as the drop in revenue cannot be offset by lower spending and will ultimately be financed by more emissions, contributing to hyperinflation.
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