Peso Slaves And The Tax Hammer

[jp]

I think one of the big issues - besides corruption - is that many avoid paying those taxes. If all paid the taxes they are supposed to pay then there would be more funds available to fix the infrastructure.

An even bigger problem is that the model of taxation assumes avoidance and over-compensates in an attempt to raise more revenue, leaving Argentina with a theoretical tax rate of 108% on profits.

http://www.doingbusiness.org/~/media/GIAWB/Doing%20Business/Documents/Special-Reports/Paying-Taxes-2013.pdf

There are advantages to having a broken model. You can grant political patronage to allies in the form of turning a blind eye to their tax affairs. And when necessary you can order AFIP to investigate anyone who dares challenge you.

 

[Bajo_cero2]

Gpop, well, add a 35%.
You need an accountant.

 

[arlean]

The man who has helped me in the past with my web site was sick for a couple of weeks and told me that (being sick and unable to work) is especially hard because he is rated at a certain income level by the government and it doesn't matter whether he makes it or not, he has to pay it.

He and I have a little language challenge between his English and my Spanish I repeated to try to be sure I was hearing right and he indicated that I had it right (assuming HE understood ME!) Have y'all ever heard of that? Is it true?

 

[Peony54]

I have heard this also though am completely baffled by it. As a freelancer my income varies greatly each month and I don't see how the government could place that restriction. The things they do its like their basically begging people to claim a lesser income then that they make! I know I have a limited knowledge of the system but I believe if they made things easier and lowered the taxes an employee/employer has to pay that they would be able to get sooo many more people to pay them therefor getting much more in taxes overall.

 

[EdRooney]

Great points from all here. The take away is:

1. The tax system (esp. the monotributo sys) is in dire need of reform.
2. Pay an accountant to help you pay less taxes.

1+2= The richer you are, the better the accountant you can hire, the more you can game the system.

Looking at the options this upcoming election, I don't see any viable candidates with either a proposal or the political backing to change this situation.

Then again it does bear an uncanny resemblance to the pattern in the richer countries, so silver lining?

 

[Bajo_cero2]

Monotributo works well.
You don t pay much and you don t need an accountant.
However, the 15 k limit is for employed. Those who pay monotrbuto don t pay income tax.

 

[EdRooney]

Hey Bajo,

I'd love it if you could prove me wrong on this, but the problems I see with the Monotributo include:

1. Its classification system is precisely not income based, so it is regressive at both its upper and lower ends, with lower income monotributistas paying a higher share of their income and higher income monotributistas paying a lower share of theirs.

2. It encourages work en negro. On the lower end of the income scale, many, many people I know cannot seem to get jobs en blanco (situaciones de dependencia). Their only option in terms of getting some of the benefits afforded employees is to pay for a low category monotributo. This way they can at least have some kind of retirement, health insurance, etc. So in effect, the monotributo serves as a stop-gap measure: it keeps poorer people from accessing the greater benefits of working en blanco and lets the public administrations off the hook about having to get everybody properly registered.

3. Continuing with the previous issue, lower income monotributistas are at an extreme disadvantage in terms of obtaining loans or participating in many government subsidised loan programmes. We saw this recently in Jujuy province, where the state has a huge mortgage programme to address the recent land issue. The assumption there was, if you're a monotributista, you're rich so why do you need a state subsidised mortgage? This reasoning is excellent, but the problem is that monotributista does not always equal rich landowner. This is in addition to being treated as second-class citizens in things like obra sociales, etc.

I haven't really thought much on a better solution; all I'm doing here is enumerating some of the more egregious problems I've witnessed. And like I said, I'd be thrilled if you could show me where I'm wrong on this.

Best,

Ed

 

[Bajo_cero2]

Ed,
1) no? I understand the opposite.even there are other factores involved, it is all about how much gross money you make.
2) i think you confuse to work en negro with fraude laboral. Monotributo makes no difference.
3) you are describing the issues of the capitalist tax system. Right, rich people should pay more...wait, they do! I pay 21 + 35% plus accountant. Damm socialist!
4) low categories has no control. High categorías has to do the invoices on line at afip website.
5) i don t see the relationship regarding monotributo and loans.
Banks prefers people who are employed because they can easily enforce the payment while they cannot do it with monotributustas. Salaries are paid through a bank.