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Friday, March 31, 2023

Income tax and IASS reduction: When does it start to take effect?

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“Once they are approved, it begins to take effect,” explained the senator who added that “the following month (from the approval of the law) retirees and workers they will see in their pocket, especially those who have less income, the result immediately”. Gandini remarked that he expects this reduction to be approved in March so that he can take effect in April.

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It is necessary to take into account that the personal income tax and the IASS are liquidated annually and that at the end of the year the return of what was contributed in the months prior to the change will be carried out, which would ideally be January, February and March. “They are going to settle at the end of the year, and it will be returned to them at the end of the year because these first months of the year they pay for a higher amount, and since it is an annual tax, it is discounted at the end of the year and they will be returned ”, detailed the senator.

How will the discount be?

According to the decree presented by Lacalle Pou this Thursday, the tax system must be improved so that personal income tax is not a tax on wages but, effectively, a family income tax. Therefore, a key point in the rebate project is the increased deductionswhich also allows reducing the tax burden of IASS taxpayers and SMEs.

Specific measures include increasing child deduction from 13 to 20 Bases of Benefits and Contributions (BPC), maintaining the duplication in the case of children with disabilities; the increase in the maximum cost of housing for mortgage credit deduction from 794,000 to 1 million Indexed Units (UI), maintaining the annual deduction ceiling of 36 BPC; and the increase in rate of deductions admitted from 10% to 14% for taxpayers with annual income of up to 180 BPC. Likewise, the percentage of the amount of lease from 6% to 8%.

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These measures reach 75% of personal income taxpayers, especially the 47% with the lowest income, and 14% will cease to be taxpayers —35% of those with the lowest income. Regarding the IASS, the non-taxable minimum is increased to 108 BPC, benefiting 100% of taxpayers and excluding 11% from paying the tax. Finally, taxpayers included in the tax regime are forgiven Monotributo Social Mides.

Source: Ambito

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