In a national address delivered yesterday, President Cristina Fernández de Kirchner announced that the national income tax threshold would increase by 20% starting 1st March.
After the change, individuals will begin to pay income tax on a gross income above $8,360 per month. The threshold for married couples with two children will rise to $11,563. The increase in the income tax threshold will cost the federal government an estimated $8bn this year.
In the same announcement, the president declared a 15.8% increase in pensions from March and highlighted a decrease in the unemployment rate to 6.9% after the fourth trimester.
The decision to raise the income tax threshold comes amid continued unionist pressure for such an increase, as wages have risen with inflation while the minimum taxable income level remained fixed. Although the increase in the threshold is less than the 25% national inflation rate reported by private firms last year, the president addressed the issue of inflation during yesterday’s announcement and asserted that under the circumstances, “The government has not raised any sort of tax.”
The announcement was generally well received by the public, although critics note that the threshold applies to minimum gross income and not net salary earnings. Adjusted for net salaries, individuals earning at least $6,939 and families with two children earning $9,597 will pay income taxes.
Several union sectors also noted that increasing the threshold will not fix underlying problems with the tax system, including Hugo Moyano of the General Labour Confederation (CGT) and Omar Plaini, a congressman with the Frente Para la Victoria (FpV) party, in statements to Radio Continental. Hugo Yasky, official of the Argentine Workers’ Union (CTA), added that the minimum taxable income threshold should be re-evaluated in October of this year.
A press conference with the Federal Administration of Public Taxes (AFIP) is scheduled for this afternoon to explain the income tax changes in more detail.