Argentina Advances Bill Exempting 1.3 Million From Income Tax

(Bloomberg) -- 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.

READ: Argentina to Hit the Rich With Wealth Tax as Covid-19 Costs Rise

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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