- Monotax: the dilemma of changing the category or leaving the simplified system
- Does the tribute lean toward informality? Opinion of specialists
he Simplified system for small taxpayerspopularly known as “unilateral contribution”It has returned – once again – to settle at the center of public debate in Argentina.
Was there any specific change? Currently, within the framework of the second generation reforms – labor and taxes – publications have appeared indicating that the Minister of Economy, Louis CaputoHe had sent a draft to businessmen to apply for the elimination monotribute.
However, this information was categorically denied President Javier Miley. “Lies and criminal operations,” the president said in an interview. Neura.
Possibility of eliminating the simplified system It’s part of a more complex debate. In reality, International Monetary FundHe suggested that when signing the extended facilities agreement with the government,Harmonizing the single tax rate and improving the transition of small taxpayers into the general tax system“.
“You have three systems for taxing income, the dependent relationship system, the self-employed system, and the unilateral tax system. The rates are very different. So it seems that Argentina will have to order this. Kabuto will go ahead and request this, and it was already done at some point in the original canon“, commented the Minister of Liberation and Transformation of the State, Federico Sturzeneggerin a radio interview. He did not rule out possible changes to the scheme, although that decision would be made by the economy with the proposal in hand from the International Monetary Fund.
Established in 1998 through approval Law 24977Monotax has been offering small taxpayers, by paying a fixed amount, a 27-year payment period Pension contribution, social work, income tax and value added tax (VAT); A more straightforward way to “pay your taxes,” they summarize from Iral Mediterranean Foundation.
currently, monotax includes 11 categoriesWhich is determined according to the level of the taxpayer’s annual bill (gross income).
In August, Customs Collection and Control Agency (ARCA) Updating single standards, According to the semi-annual change in the Consumer Price Index (CPI). Monthly values range from $13,663 in Class A until $43,129 for Class H enrollees.
According to data issued by Mediterranean Foundation“,”More than 80% of those registered are concentrated in the bottom three categorieswith few reclassifications and little migration towards the public system (Registered Responsible Persons).”
This dynamic is explained by three structural problems that the system suffers from: Low pension contribution, low social work contribution and evasion due to so-called “financial stunting”; A maneuver by taxpayers to remain in a lower bracket, or, failing that, in the simplified system (Underbill or split your income).
In addition to the data he provided Ecofuse Consulting Companydirected by Economist Miguel Kegel:”On average Single earners contribute 4.5% of their work income, compared to 28% for the self-employed (VAT deduction not included).”
Monotax: the dilemma of changing the category or leaving the simplified system
Incentive structure between the simplified system (single tax) and the general system (self-employed) It was incorrectly aligned. Currently, according to tributaries Sebastian Dominguez, some 2,100,000 taxpayers They are recorded as monotributistas, compared to Nearly 400,000 are self-employed.
“In practice, the scheme ended up working as is Low cost, accessible and widespread formality“But also as a reduced contribution method, with pension implications involving a high hidden financial cost.” Iral Mediterranean Foundation.
For her part, Alberto MastandreaPartner in charge of the Tax and Legal Department at BDO ArgentinaHe explained to Historian That there is a “big gap” in front of the taxpayer who turns to the public system, “Taking into account VAT, profits and the freelancers you will have to faceIn addition to all administrative matters such as: Submit monthly and annual statements under the section“.
Retirement and social work contributions
To understand the dimensions of the problem, it is necessary to draw a diagram of what happens with the simplified system for small taxpayers, especially with Retirement contribution and social work.
Mastandria He noted that monotributistas, to contribute to the retirement system, They will receive a minimum income “regardless of the income represented by the category in which they are registered”.
He added: “The retirement they will receive will be the minimum, which is currently about $340,000, meaning that those who have contributed throughout their lives as a single worker will receive the minimum income.” The average pension contribution made by a single earner is $65,000, with the lowest brackets contributing $13,663 and the highest contributing $118,346.“.
In pension matters, the pension contribution varies depending on the category of taxpayer. However, in all cases, he is granted the right to do so Universal Basic Benefit (PBU) It allows the calculation of years of service within Argentine Integrated Retirement System (SIPA).
“The scale of imbalance between systems is enormous. While an employee in a dependent relationship contributes on average 11% of their salary, and a self-employed person contributes about 5%, a single earner contributes barely 0.9% of salary.“, sums up the document from Eral prepared by Laura Caullo and Guadalupe Galindezwhere imbalance appears.
In addition, it is necessary to point out that the majority of holders of unilateral contributions should receive a social benefit, which does not happen in practice. “There are many social businesses that do not accept taxpayers from the simplified system, which is why this benefit is withheld.Mastandrea said.
Added to this is the “motivation” problem. Although taxpayers in the lowest brackets get the same access to social work as taxpayers in the highest brackets, The truth is that lower tier unilateral shareholders see no reason to reclassify themselves.
According to the tax specialist, the taxpayer is the one who belongs to the lowest category in the simplified system The social work component contributes $19,239.97, while the value in the highest category is $65,806.30..
Does the tribute lean toward informality? Opinion of specialists
They were warned about this by the Mediterranean Foundation The monotax system shows the aging process.
“The low participation of young people indicates that the gateway to the labor market is no longer this system. But the informality. At the same time, the bulk of shareholders It is concentrated in the most productive age group, between 30 and 49 years, which explains nearly half of the total membership.“, they disagreed.
Here “two sides of the same coin” appear. At the national level, the report’s authors point out: About 10% of employees contribute under the simplified system.
“Kappawith 20% of its employees as sole shareholders, tops the rankings and reflects a job market geared towards professional and independent services. They follow him Between rivers (15%), Cordoba (12%), Santa Fe and The pampas (11%),” in detail.
on the contrary, Tucuman Province (3%), Santiago del Estero and Jujuy (4%), La Rioja and Catamarca (5%) They have much fewer cases. There, the problem “is not the decline in the unilateral tribute contribution, But high informality and low intensity of formal small-scale professional or trade activities“.
Elizabeth Piacentiniaccountant and president of the SME Committee of the Professional Council of Economic Sciences of the Autonomous City of Buenos Aires (CPCECABA), agreed with this diagnosis.
“Young people often benefit from the single tax system, but perhaps on other occasions they consider that their retirement is so far away, that they can collect anyway and work without making contributions. However, It forces them to remain in the informal economy, unable to obtain bank loans, and unable to justify their contributions to their banks or virtual wallets from where the contributions come from.“, he pointed out in an interview with Historian.
Regardless of whether or not the simplified system is accessible, Axis It is the high rate of informal activities in the country.
In the second quarter of 2025 43.2% of workers work outside the framework of work, taxes and social securityAccording to Permanent Household Survey (EPH) Who posted Indic.
“At the moment, those who contribute their entire working lives as taxpayers to the simplified system He receives roughly the same retirement as someone who has never contributed to the tax systemThese are the issues that must be corrected. Many young people also have low expectations that retirements will increase“This may discourage registration in the aforementioned system,” Mastandrea said.