On July 22, the official regulations for the Income Tax were published in the government bulletin. This regulatory framework officially reinstates the fourth category of the tax following the approval of the fiscal package by Congress.
Despite ongoing tensions due to negotiations, the government successfully passed the tax, which will take effect this month and will be reflected in salaries received in early August.
Various unions have expressed strong opposition to the reinstatement of this tax, which had previously been eliminated by Minister Sergio Massa. Unions representing oil workers, oilseed processors, and bank employees are among those voicing their discontent. There are even discussions in union circles about a potential surge of individual legal actions against the decision.
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The CGT met with the government to express their objections to the labor reform and the Income Tax. It’s important to note that the return of this tax was agreed upon with many governors, who receive a share of the revenue through co-participation.
A representative from the union coalition “The salary is not profit” mentioned that labor unions are currently reviewing their legal options. This has led to the decision that each union will present its own case, as established by the CGT and the CATT earlier on. The representative predicted a “tsunami of claims” would occur.
For example, La Bancaria, led by Sergio Palazzo, continues to actively demonstrate its dissatisfaction with the return of the fourth category tax. With the slogan “the salary is not profit,” the union firmly believes that salaries should not be subject to taxation.
Palazzo recently announced on El Destape Radio that La Bancaria would file a lawsuit against the Income Tax by tomorrow at the latest. He stated that the lawsuit was prepared, and they were only waiting for the final figures.
Similarly, oilseed workers were on the brink of strikes during Congress’s discussions around the foundational law and the fiscal package. The Federation of Workers in the Oilseed Industrial Complex (FTCIODyARA) and the San Lorenzo Oil Workers and Employees Union (SOEA) issued a statement announcing a work stoppage starting on July 24.
In terms of oil workers, the new regulations removed the 22% differential for their region but included an exception for “well personnel.” The private oil workers’ union from Río Negro, Neuquén, and La Pampa clarified that these workers are exempt from the Income Tax as per the reestablishment of the law.
According to Article 7 of the DNU, “well personnel” won’t be subjected to the tax, which refers to those engaged routinely and directly in activities like oil or gas exploration, drilling, maintenance, and other specific operations.
The regulation makes clear that administrative staff do not qualify as “well personnel,” nor does anyone else outside of the defined groups.
Approximately one million workers will be affected by the tax changes outlined in the DNU 652/2024, which sets the threshold for single taxpayers at 1.8 million pesos gross, around 1.5 million net, and for parents of two children at 2.2 million pesos gross, close to 1.95 million net.
Those earning a gross salary of 4.9 million pesos pay a 35% tax rate. For married individuals, tax liability begins at gross incomes exceeding 2.2 million pesos, with progressive rates ranging from 5% to 35% for those earning 5.5 million pesos.
The economic ministry, headed by Luis Caputo, stated that the tax brackets have been adjusted to increase gradually with significant income raises. Previously, taxpayers faced a near-flat rate or high percentages, but now there is a range from 5% to 35%, making the tax structure more equitable.
With these changes, the system is returning to a progressive personal income tax structure, ensuring that lower earners pay less. The government also noted that discrepancies affecting individuals with the same salary based on their location or line of work have been eliminated.
The minimum taxable income adjustment is scheduled for September this year and will occur every January and July starting in 2025, calculated using the consumer price index published by Indec.
Furthermore, the decree indicates that an exceptional adjustment will take place in September based on the consumer price index for June through August 2024. Adjustments in January 2025 will be based on the index from September to December 2024.
Source: https://www.perfil.com/noticias/economia/vuelve-la-cuarta-categoria-de-ganancias-y-los-gremios-se-preparan-para-ir-a-la-justicia-quienes-tienen-que-pagar-el-impuesto-y-nueva-escala.phtml
