The restitution of income tax of the fourth category, now baptized as tax on Personal Income, raises a problem regarding its implementation retroactively to January 1 of this year. The longer the legislative process takes, the more retroactive payments will be accumulated to be paid by workers who are not doing so now.
This is how he put it Sebastián Domínguez, from SDC Tax Advisors. “As the tax on human persons is per calendar year, Any reform that is made during it has effect for everything. It is not illegal for it to be valid retroactively to January 1,” Domínguez said.
The tax advisor indicated that, “however, as This project will undergo its legislative process and in the best of cases it is approved in February or early March, there will be employees who receive their salary for January and eventually February at the beginning of March, “They are going to find that, with their March salary, they will have to deduct what they received from the previous months.”
However, Domínguez estimated that “There will probably be a rule to do it in installments, but perhaps the employees already spent the money in these circumstances of inflation and paid on what they earned and already spent is not reasonable, regardless of whether it is legal.
Instead, he maintained that among the positive aspects of the project “it ends with the floor and the increased special deductions, which caused employees who were above the floor to quickly pay the 35% rates.” “This is eliminated and we return to the original characteristics of the Income Tax”added the partner of SDC Asesores Tributarios.
It must be remembered that the previous version, instead of modifying it entirely to generate the effect that fewer people would be reached, at the proposal of the former Minister of Economy, Sergio Massawhen he was still president of the Chamber of Deputies in 2022, what he did was generate increases in the “increased special deductions” which caused a kind of non-taxable minimum effect, although this continued to exist and was substantially lower.
In factthe table of categories for 2023 started from $234,676 per month of gross salary for a single, with a rate of 5%, but the floor due to the special deduction was about $434,000 at the beginning of the year. So those people were reached but they didn’t have to pay.
In 2023, Massa first proposed moving to a new way of calculating the floor and categories, based on the Minimum Living and Mobile Wage (SMVM). The floor became equivalent to 12 SMVM, which gave a salary of $1,872,000 and then in the middle of the electoral battle, Peronism with the support of the current president Javier Milei, who was a deputy, approved the repeal of the fourth category, leaving only a schedular tax for very high personal incomes that affected less than 1% of people.
Source: Ambito
