He Government is taking steps to address the tax burden inequality faced by the self-employed. In this context, a bill will be presented in Congress to establish a simplified tax regimeknown as “SIMPLE“, aimed at self-employed workers whose income do not exceed 15 minimum vital and mobile salariescurrently represented by $1,770,000 and that will increase to about $2,000,000 as of October 1.
This initiative seeks to correct existing imbalances, where some independent workers, not being in the monotributista regimebear a higher tax burden compared with salaried employees who have similar incomes. According to the Ministry of Economy, a single self-employed person who earns the equivalent of 15 minimum wages pays around $5,600,000 a year in income taxwhile a salaried employee does not pay this burden.
The regime “SIMPLE” is conceived as a tax relief, especially considering the transition from the monotax to the general regime. The new regime will apply to self-employed, merchants and professionals who have monthly income of up to 15 vital and mobile minimum wages, offering an intermediate option between the monotax and the general regime.
In addition to this bill, immediate measures have been anticipated to provide tax relief to the self-employed with lower contributory capacities. These include the reduction of the income tax withholding percentage, deferral of the payment of VAT and the monthly contributions of self-employed workers for the months of sSeptember to December 2023, and total absorption of the $60 thousand bonus by the State through employer charges.
Likewise, the possibility of expanding the regime is being evaluated “SIMPLE” for micro and small businesses with up to 3 employees. It is evident that the government seeks to balance the tax burden and promote economic activity to boost the country’s recovery and improve the situation of self-employed workers.
What does this mean for freelancers?
SIMPLE will imply a significant reduction in the tax burden for self-employed workers who register in this regime. Specificit is estimated that SIMPLE beneficiaries will pay between 20% and 30% less taxes than the self-employed who are currently in the general regime.
This is because SIMPLE will apply a single rate of 20% on gross income, without considering deductible expenses. In addition, self-employed people who register in SIMPLE will not have to pay income tax, VAT or social security tax.
Who will be able to access SIMPLE?
SIMPLE will be available to self-employed people who meet the following requirements:
- That your gross annual income does not exceed $2,550,000.
- Who develop commercial, professional or service activities.
- That they are not monotributists.
When will SIMPLE be implemented?
The bill that creates SIMPLE It has not yet been approved by Congress, so it is unknown when this new regime will be implemented.. However, it is estimated that SIMPLE could come into effect as early as 2024.
Impact of SIMPLE on the economy
SIMPLE is expected to have a positive impact on the economy as it could contribute to the formalization of self-employment and the generation of employment.
Specifically, SIMPLE could attract more independent workers to the formal market, since it would offer them a more attractive alternative from a tax point of view. Furthermore, SIMPLE could generate new jobs, because the self-employed who benefit from this regime They could have more resources to invest in their activity.