Argentina Advances Bill Exempting 1.3 Million From Income Tax

Argentina Advances Bill Exempting 1.3 Million From Income Tax

The tax reform was spearheaded by the Peronist coalition. Aim is to boost economic recovery through retail spending

Argentina’s lawmakers have taken a major step in exempting about 1.3 million citizens from paying income taxes.

After a marathon debate, Argentina’s lower house of Congress passed a bill on Sunday to double the minimal taxable income to 150,000 pesos a month ($1,633) from the current level of about 75,000 pesos for a single person.

The reform, pushed by the chamber’s leader Sergio Massa ahead of mid-term elections in October, passed unopposed after a rare Saturday legislative session. The measure now goes to the Senate.

Massa and other Peronist leaders have sold the bill as a way to boost Argentina’s economic recovery from the pandemic. They argue it’ll incentivize consumer spending, which will translate into more revenue from sales taxes.

To help plug the gap of lost income tax revenue, Argentina is targeting rich citizens. The nation’s wealthy have until April 16 to pay a one-time “extraordinary contribution” derided by business chambers as anti-competitive. A judge recently ruled in favor of one citizen seeking to avoid the tax.

Argentina’s government set a primary fiscal deficit target of 4.5% of gross domestic product for this year. It expects to finance most of the spending gap by printing money.

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