Employer fees, profits and the new work system These are the three new variables that the government has added to the labor reform under analysis that it wants to present to the new Congress next December to address it, which was confirmed in the last few hours by Economy Minister Luis Caputo.
Labor reform is one of the topics that has attracted the most press coverage in recent days, highlighting the importance of the issue for Argentine workers who do not know in which direction the changes proposed by the government may go.
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Minister Caputo referred to the labor reform yesterday, Wednesday, November 13, at the conclusion of the annual conference of the FIEL Foundation, where he provided some details about what they are discussing in the official sphere about the measure. He explained that everything was still being analyzed, which is why he preferred not to provide final numbers or data, although he commented on three issues that, in his opinion, would help boost formal employment in the country, once the reform progresses.
“We are doing a cost analysisAdding other variables in addition to what was heardOr, in essence, it is the following: one of them is baReducing employer fees by three points and replacing them with a mandatory severance fund“Or it is much easier for companies now to be able to deal with layoffs, both in terms of cost and in terms of litigation.” In this sense, he added: “We believe this will help a lot in the formalities.”
In second place was the issue of taxes. “The other thing we look at is yourStrongly reduce human income tax deductions. And that’s basically it What he seeks is for the economy to become more formal, “Because one can deduct more, they have to ask for an invoice, and that really creates more formalization,” he said.
A third said: “EhWe are considering a new incentive system for new hires.He stressed that this matter will be very well received by the business community.
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As for The tax field explained that the government seeks to eliminate “distortionary taxes.”. “We know the total income at the provincial level, at the national level, the check tax, withholdings, the corporate income tax that today also makes us uncompetitive with respect to other countries in the world,” he added.
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But also, the head of the Treasury was direct: “Any of those things you touch are very expensive for us today. They are all taxes that generate a lot: the tax on the check about a point and a half of product, the 1.2 deductions, and so on, but they are all things that we cannot afford today, because what that means in the short term is breaking the fiscal anchor.”
For the minister “These are luxuries that countries that have done better for many years can afford,” Because they can finance it. In our case, we cannot afford this luxury and financial balance, the financial pillar is the heart of our programme, so we are clear about where we want to go, but to get there, we need to increase revenues. But we want it to increase in a virtuous way, not by increasing taxes, but by trying to increase the base, that is, by formalizing the economy, generating new jobs and making the economy grow.”
In this sense, he added: “We believe so Next year we will probably grow by 5% or morethen andIn this first phase at the tax level, we are focusing on giving a big hand to labor reform to achieve greater regulation, It is essential for us. This is a first step and there will be other things as we said, simplifying taxes, eliminating taxes; but The essence of what we want to do is eliminate the most distortive taxes“, suit,
Finally, Caputo highlighted: “VWe will achieve this while making the economy grow. We have calculated our own numbers, and if we can grow by 6% over the next few years, which is quite achievable for Argentina, we will use all that surplus to put that money back into the private sector.” He then added: “That number is about five hundred billion dollars, which is more than Argentina’s debt today; Therefore, there is still a lot of work to be done here, but let us be clear that I want the horizon, and our commitment to get there,” he concluded at the conclusion of the Foundation for Latin American Economic Research (FIEL) conference.
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