Argentina. Income Tax Abolished For 99% Of Wage Workers

Argentina may seem like a new tax haven, but that’s not the case: poverty is growing in the country, which in 2023 will affect 40% of the population living below the subsistence level.
To help people make ends meet at least a little, before the presidential elections scheduled for October 22, which are just a few weeks away, the Argentine Parliament passed a bill to abolish income taxes for almost all wage workers in the country. This measure was proposed by Economy Minister Sergio Massa, one of Argentina’s presidential candidates who leads the current center-left governing coalition that finished third in last August’s primaries.
Massa had already enacted a temporary income tax exemption for 99% of wage earners in his emergency decree, which now becomes law after being approved by the Senate vote of 38 to 27. Income tax will be abolished for more than 800 thousand Argentine workers and pensioners. Only those whose earnings “exceed 15 times the federal minimum wage,” or 1.75 million pesos per month (about $5,000 at current exchange rates) will continue to pay it.
The new law has once again drawn attention not only to the problem of poverty in Argentina, but also to the paradoxical fact that having a permanent and stable job does not guarantee a decent life. The cost of the minimum basket of goods and services is growing by leaps and bounds: in August 2023 alone, it increased again by 14.3%.
According to estimates by the Budget Commission of the National Congress of Argentina, in 2024, exemption from personal income tax will cost the country’s GDP 0.83%. The International Monetary Fund, which approved a new $7.5 billion loan to Argentina on August 23, expressed deep concern over government spending and the soaring inflation.