Among the eight measures contemplated in the new fiscal package, the Government has included a strong reduction in personal assets. The changes provide for a reduction in the threshold from which the tax begins to be paid, a reduction in the rates and also give the possibility of 5 year advance payment with a reduced rate, an initiative which aims to bring forward the collection revenue and thus respect the tax adjustment agreed with the Monetary Fund in 2024.
According to the project sent by the Executive to governors and legislators, The non-taxable minimum will rise from $11 million to $100 million and the family housing deduction will increase from $56 million to $350 million, which means that the tax base reached will be reduced. Furthermore, these amounts will not be exceeded because they will be adjusted each year based on the annual change in inflation published by INDEC.
Another advantage is the gradual reduction of the scale of progressive rates, eliminating existing discrimination for goods located abroad. For tax year 2023, the proposed maximum rate is 1.5%which will be gradually reduced up to 0.25% in 2027, below the 0.75% forecast in the December project and the minimums of previous years.
Since its creation in 1991, the tax has been extended for nine periods and last until 2027. Generally, rates have remained between 0.5% and 1.25% until Alberto Fernández’s management raised it to 2.25% for goods coming from abroad, which made its collection equal to 0.76% of GDP in 2020, while the previous average collection did not exceed 0.3% of GDP, according to the Edelstein, Mariscal, Torassa & Asoc study .
Thirdly, a special regime is created that allows you to advance payment for 5 years (from 2023 to 2027). paid at a reduced rate of 0.45% per year for goods that exceed the non-taxable minimum, and thereafter will be equal to 0.25% of the excess until 2028. In the case of taxpayers who send goods for “laundering”, the rate will be 0.5%. Therefore, the former will pay 2.25% for five years and the latter 2% for four years.
The advance will not require the filing of affidavits and will allow for tax stability through 2038 for personal property and any other national taxes that tax any asset. However, “since this reform is foreseen by law, nothing prevents Congress from deciding to repeal it in the future and increase the burden of the property tax, as happened with Alberto Fernández,” said Darío Rajmilovich, partner at Expansion Holding.
Moreover, taxpayers who fulfilled their obligations between 2020 and 2022 and do not adhere to “recycling”, they will have a tariff reduction of 0.25% for 5 years (from 2023 to 2027).
The reduction of personal assets goes hand in hand with the “laundering” envisaged by the tax package, which requires the payment of a tax 0% special tax for those who regularize more than 100,000 dollars and leave them in the financial system. Like Mauricio Macri, Javier Milei’s tax reform aims to encourage the repatriation of capital that has evaded taxes in order to lighten reserves and improve collection.
Due to the recession, first-quarter revenues were the lowest in ten years. To achieve a fiscal surplus, the government has sharply adjusted spending and now seeks to increase taxes (profits and monotax) and recompose resources (moratorium, personal assets and money laundering). “They are first and foremost trying to obtain a volume of income that they don’t have today, given the moratorium and also with their personal assets,” said Martín Caranta, partner at Lisicki Litvin & Asociados.
Therefore, according to the specialist, changes in personal wealth are aimed at: 1) generating money today with advance payments, 2) making money laundering more attractive with a reduction in taxes, or making it not an obstacle, and 3) preventing it future taxpayers will be tempted to move to another jurisdiction, resulting in reduced rates. Together, the fiscal measures could contribute 1% of GDP, which is equivalent to about $5 billion.
Source: Clarin
