Due to inflation and wage adjustments, the gross minimum wage of $404,062 which exempts dependent workers from paying income tax has become obsolete again.
It’s that salary plan corrected in January according to the change in the RIPTE index (formal wage index) between October 2021 and the same month in 2022, which was 78.83%, below inflation.
Accordingly, these days workers will collect February salaries according to an Earnings salary plan that is already 4 months late. This equates to a difference of about 25% from November 2022 to February 2023.
The small relief represented by the January adjustment which, by the way, has been less than inflation since then is blocking the new joint 2023 because the agreed wage increases would lead many workers to pay Profits again or to pay much more.
For this reason, the unions of various activities such as banks, oil companies, supervisors, oil companies, steel companies, automobiles, They have proposed a new minimum wage adjustment o that the higher profit discount is absorbed by businesses.
In the case of bankers, in the midst of the 2023 joint discussion, the union proposes that banks absorb or compensate the larger profit deduction that would occur if they agreed on a salary increase. And in some cars workers do not accept overtime because a part of that additional would be discounted by the Earnings.
Tax officer Marcelo D. Rodriguez, of MR Consultores, believes that “the statements are valid, especially considering the profound distortions generated by the uncontrolled inflation suffered by the Argentine economy, especially on wage earners. The request should be extended to employees receiving compensation in excess of $404,062, which very quickly they are reached by the maximum rate of 35%”.
Rodriguez states that “a major revision of the income tax law is imposed in order to eliminate such discrimination and inequity, and to ensure that the tax adequately reaches the taxable capacity”.
until the minimum wage adjusted in January by 78.83% compared to a 2022 CPI of 94.8% – a loss of just over 8%, claims the taxman Sebastián Domínguez who “added to the 6% inflation in January 2023, plus what results from February, makes Income tax must be paid on nominal income which is not real income”.
Consequently, adds Dominguez, “the income tax law should be reformed and provide for the automatic adjustment of deductions and tax rates for changes in the CPI Prepared by INDEC. This automatic adjustment could be quarterly if inflation remains below 100% on an annual basis and become monthly if this parameter is exceeded”.
Miguel La Vista, partner of the La Vista Casal studio, argues that “During 2022, the government adjusted the profit threshold only 3 times, which generates ever lower wages supplementing income that pays taxes on profits. We believe that at this point, with the acceleration of inflation, the adjustment of the salary exempt from personal income tax should be made on a monthly basis”.
Charles Arterburn is a seasoned business journalist for News Rebeat, where he provides comprehensive coverage of the latest trends and developments in the world of finance and economics.