In relation to this, the Minister of Economy in mid-January defended the measure. Arbeleche assured the press that This tax reduction will be “permanent” and it will be felt over the years “in people’s pockets”. In principle, it is known that the initiative would apply on the lower bands of both taxes. However, it is still unknown how big the cut will be.
critical voices
The tax reduction of the IRPF and the IASS brought several voices that criticized the government’s decision, among which are the senator Mario BergaraThe ex-president Pepe Mujica and the Advisory Fiscal Council (CFA) of the Ministry of Economy and Finance (MEF).
Last week, the national senator for the Broad Front (FA) Mario Bergara referred to the imminent tax reduction announcements and said that, although he does not see them “with bad eyes”, they have a tinge “electoral” and “demagogic”. In addition, he mentioned other taxes that the entire population pays, such as VAT, in which, in his opinion, the government should focus, instead of personal income tax and IASS, which are only paid by “essentially a quarter of the population with the highest income.” .
On the other hand, former president Pepe Mujica also expressed his opinion on the tax reduction, saying that it seemed to him a “phenomenon” but he believed mean that “do not remember those who are earning salaries of 15 or 20, and throw them some chirolas over there”.
Before Bergara and Mujica’s statements, the Fiscal Advisory Council (CFA) of the Ministry of Economy and Finance (MEF) issued a report last Wednesday in which it determined that there could be “risks” at the fiscal level in case of advancing with the reduction. The “Report on the calculation of the Structural Fiscal Result” at the end of 2022 indicates that the public announcements of permanent tax reductions in personal income tax and IASS imply “risks of possible reversal of the fiscal consolidation process in structural terms.
current scales
Since the last update of the Benefits and Contributions Base (BCP) last month, the IRPF taxable minimum became 39,620 pesos per monthwhile that of the IASS, which is annually settled, of 543,460 pesos per year (45,280 pesos per month).
Meanwhile, the stripes of the personal income tax and their respective rates were as follows:
- Of 39,621 pesos to 56,600 pesos: rate of 10%
- Of 56,601 pesos to 84,900 pesos: rate of fifteen%.
- Of 84,901 pesos to 169,800 pesos: rate of 24%
- Of 169,801 pesos to 283,000 pesos: rate of 25%
- Of 283,001 pesos to 424,500 pesos: rate of 27%
- Of 424,501 pesos to 650,900 pesos: rate of 31%
- Of 650,901 onwards: rate of 36%.
by the side of IASSthe tax levied on retirements was left with these scales:
- Of 543,460 pesos to 1,018,800 pesos (84,900 pesos per month): interest rate 10%.
- Of 1,018,801 pesos to 3,396,000 pesos (283,000 pesos per month): interest rate 24%.
- Of 3,396,001 pesos onwards: rate of 30%
Source: Ambito
