The Argentine economy has always struggled with a dilemma that has been postponing its resolution: overall public spending has been increasing in the last two decades, but the counterpart tax collection to finance it was not enough. However, there is a perception among the population of fiscal burden and an increase in informal activities. That is, a lapidary diagnosis of an inequitable, inefficient tax system with an anti-productive bias, also shared by the technical staff of the International Monetary Fund who prepared a proposal as a “suggestion.”.
The other’s eye. Basically, what the IMF pointed out is that the tax system could be reorganized so that it is more equitable, discourages evasion, does not punish production and, above all, so that taxes do not overlap between jurisdictions. The organization’s opinion has consensus among professional analysts because even at the risk of implementing solutions that are difficult to achieve and that leave doors open for evasion, the current system is exhausted: without touching it, less and less is collected.
Public spending has an indexed component (it is adjusted by the price level) that is 55% of the total and the rest is not automated, so the “chainsaw” goes more through this second section. For example, Budget 2026 proposed an increase in revenue of 6.7% and an increase in primary spending of 6%. According to the calculation of IARAFthe collection of the last 8 months of the year would have to grow by 13.2% real year-on-year to achieve that goal, a behavior that is impossible to achieve.
According to the tax Vademecum prepared annually by said entity, at the end of 2025 in Argentina there were 155 taxes, including those of national, provincial and municipal jurisdiction, which collect 29% of GDP. Furthermore, it is concentrated in very few taxes: VAT, the provincial Tax on Gross Income, Contributions and Contributions to Social Security, the income tax on individuals and legal entities, the Tax on bank debits and credits and Export Rights, contribute no less than 85% of the total collection. “But if we add the Fuel Tax, the Municipal Safety and Hygiene Tax (TISH), the import duties and the co-participating internal taxes, we have that 94% of the consolidated Argentine collection is concentrated in ten taxes, eight national, one provincial and one municipal.”highlights the economist and IARAF president, Nadin Argañaraz.
headlong. The other aspect on which the IMF focused is on taxes on personal income, which in our system is differentiated by whether they are on the salary (social charges and income tax), whether it is from a self-employed person in the general regime (earnings and VAT generation) and whether it belongs to the monotax regime (a fixed fee that concentrates the pension contribution, social work and profits). But the design of this tax caused the gap between the three types of taxpayers to widen, generating a situation of irritating inequality depending on the nature of the regime in question.
Firstly, the greatest distortion occurred with inflation, which was lowering and denaturalizing the Income Tax scales, causing many formal workers to almost automatically enter the last two tax scales. Also, many groups, depending on their political alignment or their negotiating power, obtained exceptions, as did certain areas of the country, virtually internal tax havens.
Milagros Gismondi, economist Invecqhighlights that Argentina has an informality rate of 45%, well above the OECD average (10%) and its regional peers such as Chile or Brazil. “The result is a dual labor market: protected formal workers coexist with an informal force with low and volatile incomes. This produces concrete costs: it limits labor reallocation, restricts the tax base and weakens incentives to accumulate human capital,” he explains. Thus, it points out that formal employment has grown slowly since the late 2000s and very unevenly between sectors. For example, construction and manufacturing, which are more employment-intensive, performed the worst. “It has a labor tax wedge higher than the Latin American average and comparable to European economies with very different labor markets. For the IMF this weighs directly on the demand for formal employment,” concludes.
For his part, the director of the Economics area of FUNDAR, Guido Zackmaintains that there is a lot of disincentive to generate salaried work and also for an independent to switch to the general regime. In this context, monotributists would go from paying 15% of their income in the highest categories to 35% and that is why, in coincidence with one of the IMF proposals, they believe that the monotribute rate should be higher (at least for the scales with the highest annual income) but, obviously, it could be unfriendly for those who are in the lower scales.. The IMF maintains that what is desirable and realistic would be for 20% of the active population to be paying some tax on their income on homogeneous scales. Zack also says that we must take note of the inequality that exists in this matter with Brazil, for example. “A worker who earns US$1,500 pays the tax in Brazil, but would not do so in Argentina and that happens with any worker who earns between US$1,000 and US$2,000. And that is something that must be corrected, but do it with tax justice so that the richest actually pay more”he proposes.
Finally, for the economist Jorge Colinapresident of IDESAthe solution to this fiscal policy dilemma is to directly eliminate Monotax and Profits, to create a Personal Income tax that reaches all people. “It should have a non-taxable minimum so that in the first income brackets the tax is not charged and then progressive rates that rise with the person’s billing amount, such as Earnings, until reaching the last income bracket where the rate in the margin would be 35% of the income,” he maintains. Of course, for this to work, ARCA would have to settle the tax with each invoice and send each month for payment, dispensing with the annual sworn declaration. The risk of this entire 180-degree turn in tax policy is that it is not done only because of its negative impact on those who should pay more. Because they should convince them that in this way, indirect taxes will go down, something unprecedented in the growing trend of tax pressure: exceptional taxes that arrived for a while, such as Earnings, the Check or the same withholdings and remained to live.
