The economist Sebastián Domínguez reviewed the tax reductions and increases made by Javier Milei's administration. He highlighted the 12 taxes eliminated so far and the three that have increased.
Domínguez expressed a positive opinion about the current administration's objective to achieve and maintain a fiscal surplus in Argentina. He considers it unfeasible to continue with a deficit financed by debt or money issuance. He emphasized the importance of reducing taxes, fees, and contributions in this context as an essential measure that does not jeopardize the fiscal surplus.
Since Javier Milei came to power in December 2023, numerous tax modifications have been implemented in Argentina. There have been 12 tax reductions or eliminations, with a focus on significant changes in Income Tax, the Monotributo Regime, and Personal Assets. Many of these reforms were carried out through a fiscal package approved by Congress, with Milei's Basic Law.
Among these modifications, improvements have been made in the scales and deductions of the Income Tax, changes in the Simplified Monotributo Regime, and the introduction of a tax amnesty and a new capital laundering program. The result of these reforms has allowed the government to achieve a primary fiscal surplus of 1.8% of GDP in 2024 and a financial surplus of 0.3%.
The reforms have also impacted the Monotributo, where there has been an increase in fees that could result in a higher tax burden for some taxpayers, especially those in the lower categories. Additionally, changes have been implemented in Personal Assets, like the elimination of the 30% withholding in Personal Assets I, increase of the non-taxable minimum, and the creation of a Special Income Regime (REIBP) in Personal Assets III.
Despite significant reductions, there have also been increases in some taxes during Milei's administration. Among them, the initial increase of the PAIS tax stands out, which was later reversed. The reform in Income Tax for Employees is also mentioned, where some exemptions and deductions were repealed, leading to more taxpayers paying the tax, although at lower rates.
Sebastián Domínguez, CEO of SDC Advisors, analyzed in detail all these tax modifications and their impact on the Argentine economy in a recently shared report.
