The government wants to eliminate Monotax

The executive branch proposes a reform that would eliminate Monotax, redefine earnings and lower employer fees. How are changes evaluated?

11/13/2025 – 1:29 pm

Within the framework of tax and labor reform, the government is considering abolishing Monotax, according to what officials from the business economic team said.

The proposal contemplates introducing changes to the Tax Procedures Law and the Social Security Law. One of the central focuses is the abolition of Monotax, which will become integrated as freelancers.

The self-employed regime will also be modified: it is assessed to raise the minimum contribution base, which will move from the current range of $50,000 to $700,000 to another range of $100,000 to $500,000, as well as enabling deductions for personal expenses. Regarding VAT, a minimum equivalent to Category F of Monotax, approximately $3 million per month, will be set.

In parallel, the government plans to reform income tax. The non-taxable minimum will consolidate around an average salary of $1.7 million per month in 2025. For the second half of 2026, single workers without children will begin paying dividends from a total salary of approximately $2.84 million. The scale will also be maintained from 5% to 35%, and the deduction ceiling will be adjusted to $5 million.

The plan also includes a new employment system to encourage formal employment. For new employment relationships, or people who can prove they have not been working for six months, employer contributions will fall from 25.5% to 17%, and personal contributions from 17% to 13%. The formal goal is to reduce the cost of formalities and expand the shareholder base.

According to businessmen who participated in the meetings, the ministry insists that the reform seeks to correct distortions and expand the scope of formalities, although there is no official schedule for the presentation yet. The package will be introduced as part of a comprehensive redesign of the work, finance and pensions architecture that the government has laid out under seven keys.