The Government defined changes in the Income Tax, which as of October will have a new non-taxable minimum. What are the other changes?
The changes would operate via decree in a “bridge” modality between the months of October and December 2023, while a bill will be sent to Congress to modify it starting in fiscal year 2024 with a semiannual update.
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The Government defined changes in the income taxwhich starting in October will have a new non-taxable minimumwhich will be taken to 1,770,000 million pesos per month, which is equivalent to about 15 minimum wages.
The changes would operate via decree in a “bridge” mode between the months of October and December 2023, while a bill will be sent to Congress to modify it starting in fiscal year 2024 with a semiannual update.
In this way, the aim is to reduce the impact of the Income Tax on a large part of the workers and alleviate the escalation. inflationary after the post-Step devaluation.
The keys to the changes in the Income Tax
- Employees and retirees will stop paying Income Tax (fourth category).
- Only the highest incomes greater than fifteen (15) monthly Minimum Living and Mobile Salaries (SMVM) will be paid: CEOs, management, deputy management, qualified positions and retirements and privilege pensions.
- According to official sources, police officers, teachers, doctors and retirees would be exempt from the tax.
- According to the Minimum Living and Mobile Wage in force today, 118,000 pesos per month, that figure would be $1,770,000. Only those who earn a gross amount greater than that number will pay Profits.
- The increase in the non-taxable minimum will be done by decree and will take effect from October.
- According to official figures, 90,000 taxpayers will pay “Higher income”. It represents less than 1% (0.88%) of the total registered jobs in the country.
- The new non-Taxable minimum of 15 monthly SMVM will be adjusted in January and July of each year.
- The benefit of the 22% unfavorable zone is maintained.
- Distortions of personal and general deductions that force the worker to be aware of administrative issues are eliminated. Less operational burden for employers – simplified system – which will result in a reduction in the cost of compliance with tax obligations.
- A simplified schedule regime is created within the Income Tax called “Higher Income”.
- As the tax is annual, “Increased income” will come into effect from January 2024. “The State makes an effort to stop collecting nearly $1 billion a year, which goes directly to consumption and improves purchasing power of workers and retirees,” official sources highlighted.
- Considering the projection of salary increases for the remainder of the year, as of December 2023 the amount withheld in the tax will be 890,000. “With our ‘Higher Income’ proposal: 800,000 taxpayers will stop paying Income Tax,” they highlighted from the Treasury Palace.
Source: Ambito
