For now the reduction in the Income Tax for hundreds of thousands of employees, say tax experts who analyzed the mega DNU by Javier Milei and the “omnibus law” sent to Congress.
The President said that he was going to roll back the law promoted by Sergio Massa in the electoral campaign, but the Government has not yet sent the new project. In the event that changes are finally voted on, the tax must be re-assessed and the discounts made retroactively.
Through a statement, the AFIP confirmed that, as of January 1, employers must settle the salaries of employees in a dependency relationship in accordance with the new labor law. Profits which exempts from paying this tax those who earn less than 15 Minimum Wages (SMVM), that is, $2,340,000 gross.
However, if the Government sends a new Profit Law as it has been announcing to go back with the elimination of this tax, and it is approved by Congress, employers must recalculate the calculation of the retroactive tax to January and deduct from the salary the amounts that correspond to the new law.
Who will pay Income Tax?
According to the taxpayers, until December 31, the worker’s income up to 15 SMVM (with the value in force in October, that is, $1,980,000) does not have earnings withheld. As of January, Law 27,725 is in force, promoted by Massa, which confirmed the decree of 15 SMVMs that, with the January value, rises to $2,340,000.
But if the bill that the Executive will send is approved by Congress, what may happen is that exempt workers become covered by Profits and that in the next remuneration they are forced to retain the difference retroactive to January because it is a tax. calendar annual calculation.
The Government did not include the reform of the Income Taxes in the megaproject sent to Congress. And they say that they will send a separate initiative with some changes in relation to the one that emerged weeks ago.
Income Tax: what changes are coming?
According to the draft of the bill that the Government distributed – and which could have some changes, as of January 2024, workers in a dependency relationship will begin to pay Income Tax from salaries of $976,516 gross monthly. And those who exceed that figure will pay Profits on the excess of the Non-Taxable Minimum (MNI), which is set at $634,371 for single employees and $839,180 for married employees with 2 children.
In the case of the self-employed, they will not pay Profits until $435,097 monthly (singles without children) and even $605,088 (married with 2 children).
Regarding current out-of-pocket income, it represents, on average, a 20% reduction in net salary.
The higher the income, in proportion, the greater the drop in the out-of-pocket salary would be, without considering the inflationary impact.
How many workers would now be reached by Profits?
With this salary floor, 1.5 million workers would be reached by Profits, with rates that reach up to 35%.
This figure could grow due to the salary increases they could receive during 2024 because that floor and the scales would remain unchanged throughout 2024.
This reduction in out-of-pocket income, apart from the drop in income due to higher inflation, explains why Minister Luis Caputo affirmed that the change in Profits will help improve the collection of that tax.
The exemption from Income Tax for the majority of salaried workers (98%), which came into force in September, was ratified for 2024 by law 27,725 approved in Congress with the support of the then national deputy Javier Milei, with the rationale that it helped reduce taxes.
Source: Ambito
