Tax reform: what are the national taxes that the Government plans to leave in place

The economic team advances in the preparation of a tax reform that will seek to simplify the current system where at the national level there could be between 4 and 5 taxes nothing more, of the 46 existing ones. Those few national taxes that would remain standing currently explain among the 75% and 80% of the total consolidated tax collection between the Nation, provinces and municipalities.

It is not ruled out then that the Government seeks transfer some taxes to the provinces, what President Javier Milei called returning “tax autonomy.” These types of taxes should be transferred to the subnational states, but to do so, pacts and agreements should be signed.

In any case, The idea of ​​simplifying and ordering the system is the guiding principle of the project that the officials working at the Palacio de Hacienda have in their portfolio.whose content would be presented in 2025, an election year. The libertarian government will need a lot of political skill to carry it forward while in the minority in Congress.

In the last hours, a American liberal founding, 1841, echoed Javier Milei’s announcement in the speech on the occasion of his first year in government, and He assumed that Luis Caputo’s team is following the axes of a proposal that was presented to them as soon as the new administration was established in the Casa Rosada.

The 1841 plan assumed that at the national level only four taxes would be necessary. A tribute to the Income of Individuals which would cover all types of taxpayers, whether employed or independent. In this case, the self-employed regime and the monotributistas regime would disappear. All people will have to pay this income tax.

Another tax that should remain in place is the corporate income tax. This includes permanent establishments, companies and sole proprietorshipsfor which expenses related to the commercial activity involved should be deducted. In these cases there would be a special regime for the reinvestment of profits.

On the other hand, the Government should maintain the current social security system for workers in a dependency relationship, and on the other hand the Value Added Tax (VAT).

The initiative of 1841 raises the possible transfer to the provinces of the VAT in case there is no longer co-participation, so at the national level it could be replaced by a sales tax. If the VAT is transferred to the provinces, they take 56% of the collection and the Nation 44%. So if there are two “VATs” their rates should respect that proportionality.

The entity then points out that according to its calculations In 2023, the four proposed taxes represented almost 80% of the total taxes collected in the country.

This is the detail:

• Profits: 20.43%, even though many workers stopped paying this tax in the last quarter, as a result of the “Platita Plan” of former Economy Minister Sergio Massa.

“Therefore, the difference, without taking into account the positive effects of a reform such as the one proposed, It would only be 24.66%, that is, US$8,000 million, or two points of the country’s GDP,” states 1841.