In an article published by El Cronista, Florencia Fernández Sabella, partner in charge of the Tax Department at Laiún, Fernández Sabella & Smudt, analyzed the limits and challenges the Government faces when considering reforms to Argentina’s tax system.

Following the announcement of a series of structural reforms by President Javier Milei, one of the key topics raised was the possibility of modifying the current tax framework. However, the room to reduce or eliminate taxes is conditioned by several fiscal and institutional factors.

In this context, Fernández Sabella explained that the measures the national government can implement are limited to federal taxes.

“Any modifications, reductions or eliminations that the National Government may promote are limited to taxes under federal jurisdiction. The worst tax we have in Argentina, which is Gross Turnover Tax, exceeds the scope of the federal government and depends on the political will of the provinces,” she noted.

The specialist also referred to the tax on bank debits and credits, one of the taxes frequently mentioned as a potential candidate for reduction.

“If we think about which national taxes could be eliminated or reduced, the first one that is usually mentioned is the tax on bank debits and credits, which —hard as it may be to believe— forces taxpayers to pay a tax simply for carrying out bank transactions. However, from a revenue perspective, it is difficult to eliminate because it is very easy to collect and its tax base grows alongside economic activity and inflation,” she explained.

At the same time, Fernández Sabella warned that reducing taxes in the traditional sense —lowering tax rates or creating exemptions— is difficult in the current context, given the Government’s commitment to maintaining fiscal surplus and meeting its fiscal targets.

Nevertheless, she pointed out that there is room to move forward with a real simplification of the tax system. As an example, she mentioned the possibility of updating the minimum withholding thresholds under General Resolution 830 for Income Tax, which would help avoid administrative procedures for insignificant amounts.

She also highlighted the importance of continuing to limit advance tax collection mechanisms and perceptions that often generate tax credits which remain frozen for long periods of time.

👉 Full article:
https://www.cronista.com/economia-politica/reforma-tributaria-que-margen-tiene-el-gobierno-para-eliminar-o-bajar-impuestos/