After 22% inflation in just three months, Massa announced that he would raise the minimum wage, which is subject to income above $330,000.

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This was announced by the Minister of Economy, Sergio Massa From November 1, the adjustment of the value of the lowest salary for income taxation will begin. (commonly called the tax-free minimum), a measure that aims to prevent or mitigate situations where there are employees who are affected by the tax without actually improving their income, that is, without purchasing. Power has improved because they only increase nominally under very high inflation.

According to the official, The gross pay that acts as the tax threshold, which is $280,792 today, will take on a value of “above $330,000.” He added in a statement on Radio Rivadavia about the change: “There is a meeting this week with the union organizations, the executive and the ministry to finalize his order; I talked about it with all the people who participate in government decisions.”

last friday Index published the inflation data for the month of September and then it became clear that in the third quarter of the year – the period between the month of the last income adjustment and the last month – Inflation was 22%. In the first nine months of the year, the consumer price index accumulated a 66.1% increase, and if the new minimum wage is confirmed, which will be taxed on earnings of $330,000 or a little more, the change in this indicator in relation to the indicator. The effect at the beginning of the year ($225,937) would be 47%.

Strictly speaking, the lowest income update to start the discount is after the evolution of the average taxable income (Ripte) of stable workers. This is an indicator that the law, applicable from 2018 onwards, has been set as a guideline for updating the various variables of the revenue scheme every January.

The acceleration of price growth and, therefore, the redistribution of wages led to updates in other months of the year.: In 2021, it was the law that established the first increase, but at the same time, the executive authority was given the power to make these adjustments, which do not include updating the amount of the scale that determines what rates apply. In each case (i.e Only minimum wage increases subject to income are allowed, to achieve this through a specially designed mechanism without changing other aspects of the tax structure).

as reported ღ A week ago, as well as the last time when the tax base income was touched (in June), the value of Ripte was discussed until March, for the new modification, it is likely to take into account what happened to the index from April. Massa’s comments suggest looking at what happened to the index in the second quarter of the year, or a variation of it, through July. If Ripte’s evolution were taken before June, the new figure would be $327,291. If instead a variation to the seventh month of the year were considered, then the new threshold should be set at $344,700. Y In the case of Ripte’s increase until August (the last data was published), then those with a salary of up to $360,368 do not have to pay taxes, always on the full amount..

House Bill 27,617, which Massa pushed through Congress last year, made tax calculations more complicated and distorted. This is because in order for a person with a lower salary to pay the income, a special deduction mechanism was created and It was decided not to change (and not allow the executive branch to do so) the table values ​​that determine, based on income ranges, what rate each person whose income is taxed pays..

On the other hand, the data we need to look at to find out whether someone is subject to the tax burden is not only the salary of each month, but also that the average gross salary for a given period. Now, for example, anyone who earns more than $280,792 in the month in question is paid if that condition is also met in the average salary for the period beginning in June. To find out if he bonus achieved, instead, the average pay value for the entire year is considered.

The renewal of the minimum wage subject to profit also involves a change in the scheme by which certain ranges of wages are applied. Increased deductions compared to those that are used regularly (Deductions are amounts that are deducted from the income on which the tax is calculated and, therefore, if they are higher, they lighten the burden). Today, that range is $280,792.01 to $324,182. With the new update, that range will become $327,290 to $377,866, $344,700 to $397,966 or $360,453 to $416,152, depending on whether Ripte is considered until June, July or August.

For expert Cesar Litvin, “the priority is to reformulate all deductions (minimum non-taxable, family taxes) and update the amount of the aliquot scale.”

What was known yesterday, Sunday, October 16, about the new change generated (implementation details and exact figures are missing) Observations of tax experts. for an accountant Cesar LitvinLisicki, CEO of Litvin & Associates, “Reformulation of all deductions (minimum tax-free, family allowances) and revised rate scale amounts are prioritized”As the entire tax scheme is affected by the erosion caused by inflation.

“The measure is not insufficient given that it represents a 47% increase compared to the amount in force from January 2022, welcomes employees,” he discussed. Marcelo RodriguezFrom MR Consultores, who added, however, a modification because of how it is done, “This is unfair and violates the principles of equality and fairness for those earning more than $330,000., which will not be affected, even though their income will also deteriorate. In addition, he considered that the decision would resolve the inconsistencies arising in relation to the taxation of the Christmas bonus, taking into account how the tax burden is calculated on this concept of salaried workers’ income.