After several unions announced plans to file lawsuits to annul the reinstatement of the fourth category of the Income Tax, diplomats have also rejected the extension of this tax to their cost-of-living allowances while stationed abroad. They indicated that they would pursue legal action to prevent these changes from taking effect.
A statement from the Argentine Association of Foreign Service Professionals (APSEN) noted that while diplomats have always paid income tax on their salaries, the additional cost-of-living allowance previously remained exempt. The organization emphasized the importance of this allowance, which is intended to match the cost of living abroad. It is crucial for covering essential expenses such as rent, healthcare, and education for diplomats and their families, as each diplomat faces these costs individually.
Additionally, APSEN expressed “its strongest rejection” of the initiative included in the recent tax reform approved by Congress. The organization announced that it would initiate legal actions to protect its members’ rights concerning the application of the tax on the cost-of-living allowance for those assigned overseas.
From the authorities’ perspective, the new regulation is seen as “clearly confiscatory” and significantly impacts the incomes of lower-earning workers, who could lose more than 2% of their earnings as a result of the new rules. Established in 1985, APSEN represents more than 1,000 career foreign service officials, all of whom were trained at the Argentine Foreign Service Institute (ISEN).
They pointed out that a diplomat’s career typically unfolds abroad, with approximately half of active-duty officials currently serving overseas. The additional cost-of-living allowance is based on a United Nations index, which most countries apply to their diplomats. In parallel, APSEN has claimed that the regulation announced on Monday in the Official Gazette is illegal and violates the fundamental rights of its members, prompting them to prepare a formal legal challenge.
It’s essential to note that contrary to popular belief, professional diplomats are subject to the general income tax regime and will continue to pay this tax on their salaries, both domestically and abroad.
In a similar vein, Argentine banking workers are also taking legal steps against the reversal of tax regulations. Sergio Palazzo, the general secretary of the Banking Association, confirmed that they have filed a legal request for the law reinstating the tax on salaries to not be applied.
According to the union’s statement, the reversal of the income tax represents a confiscatory measure that undermines the essential nature of salaries, effectively leading to a pay cut for a significant number of workers. The union estimates that 97% of employees in the sector will be affected, with salary reductions ranging from 0.3% to 17%, without the possibility of any deductions that were previously available under the old law.
Approximately one million workers nationwide had ceased to pay this tax, and the recent reinstatement is expected to increase that number significantly as individuals either return to paying the tax or begin paying it for the first time. Together with minimal adjustments to the compensation thresholds, the impact on salaries is likely to become more pronounced over time.
Source: https://www.perfil.com/noticias/economia/nuevo-foco-de-conflicto-para-el-gobierno-los-diplomaticos-iran-a-la-justicia-por-ganancias.phtml
