The Labor Modernization Law incorporates in its Article 191 a reduction in the corporate income tax rates, which will generate a fiscal impact of 0.3 points of GDP and will mainly benefit only 144 large companies in the country, according to a report by national deputy Guillermo Michel.
The modification establishes a decrease in brackets 2 and 3 of the tax: from 30% to 27% for profits between 101.7 million and 1,016.8 million pesos, and from 35% to 31.5% for profits above 1,016.8 million pesos.
Extreme concentration of the fiscal benefit The analysis prepared by Michel with data from the revenue-revealing agency reveals an extraordinary concentration in the Argentine tax structure. Of the 163,587 corporations that filed a return with a determined tax in 2024, only 144 companies represent 0.1% of the total but concentrate 56.4% of the tax's collection. The legislator questions that it is «a fiscal policy decision where the state decides to allocate a benefit in a concentrated manner to 144 corporations, only 0.1% of the total, which are also the same universe of taxpayers who already benefited from the RIGI or with the extraordinary reduction to 0% of export duties». That last measure, implemented in September, also had a fiscal cost of 0.3 points of GDP, according to the document.
Inclusion in labor reform generates controversy «This untimely reduction in the income tax rate included in a labor reform and entered by the Chamber of Senators raises several questions,» Michel affirms, who considers that the measure «requires a deep analysis and not pretend to discuss it as 'just another point' of the labor reform». The tax modification was incorporated into the Labor Modernization project that is currently being debated in the National Congress, generating questions about the pertinence of including fiscal changes of this magnitude in a regulation focused on labor relations.
How is spending reduced in the budget to maintain the surplus of 1.5 points of GDP?
Deputy Guillermo Michel raises three key questions about the fiscal measure: 'How does the Government plan to compensate for the 0.3 point drop in GDP? Of that total, 71% corresponds to corporations, representing 34.3 trillion pesos. With the reform, that collection would fall to 31.7 trillion pesos, generating a projected drop of 3.1 trillion pesos, equivalent to 0.3 percentage points of Gross Domestic Product.' 'Only 144 large companies take home more than half of the fiscal benefit,' the document warns, which takes as a basis the table 2.3.3.3.1 'Income Tax on Corporations' published by ARCA (ex AFIP). The segmentation shows that 146,257 corporations (89.4% of the total) contribute only 7.9% of the tax, while 1,856 corporations (1.1%) concentrate 76.3% of the collection.
Impact on national revenue As confirmed by the Argentine News Agency, in the 2026 budget the Government projects to collect 48.4 trillion pesos from Income Tax, equivalent to 4.48 points of GDP. 'How are the provinces compensated for the loss of 1.7 trillion pesos in revenue sharing?' 'The reform promoted by the government will substantially reduce that amount to be collected,' the legislator's report states.
How much will Buenos Aires, Santa Fe, and Córdoba lose? Of the total projected drop in revenue, 1.7 trillion pesos correspond to the provinces due to the application of the Federal Revenue Sharing Law. This represents an average monthly decrease of 144,000 million pesos throughout 2026. The most affected jurisdictions will be the province of Buenos Aires, with an annual loss of 366,557 million pesos (30,546 million monthly); Santa Fe, with 148,698 million annually (12,391 million per month); and Córdoba, with 145,240 million a year (12,103 million monthly). Chaco and Entre Ríos would each lose 81,265 million annually (6,772 million monthly), while Tucumán would give up 79,536 million (6,628 million per month).
