With the signature of President Javier Milei, the Government submitted to Congress the Labor Reform Project, which includes in Article 192: the abolition of the Internal Revenue Law for the insurance items, cellular and satellite phone services, luxury properties and Motor vehicles and boats, pleasure or sports boats and aircraft.
The so-called “luxury tax” had already undergone a change earlier in the year, when the first tier was abolished (it paid a tax rate of 20%) and the remaining tier was reduced from 35% to 18% (which is now being sought to be abolished).
According to analysts, the abolition of the tax It wouldn’t just change the prices of the cars affected today but also the rest of the offer in Argentina. César Litvin, lawyer specializing in tax issues and CEO of Lisicki, Litvin & Abelovich, explained this THE NATION: “The price of cars that are currently taxed can be reduced by up to 18%., But it doesn’t just affect luxury models. On the other hand There will be a general downward price adjustmentbecause when a better quality car lowers its price, it forces people nearby to adapt to that extent.”
Following this line, the specialist pointed out The effects will not be immediate. “There will be two phases. The first Traders who have inventory and have already paid internal taxes will have to adapt gradually so as not to work at a loss. In the second phase, when we look a little more forward, we will see a lot of movement.”
The phenomenon is not necessarily transmitted directly. “Many times To balance the situation, the terminals carry out price management. Then, um drops, it may happen that the high-end car does not crash as much and this margin is transferred to the mid-range car. “We have to see how the prices are recomposed,” added tax expert Sebastián Domínguez to this medium.
In addition, not only should car prices fall, but This would also mean a change in patent and insurance amountsas described by Litvin. The expert, in turn, said it was a necessary change: “In Argentina the tax rate on cars is much higher than in other countries. This will help you be more competitive. Provinces and municipalities should also be included as they have important weight in the equation.”
In his analysis, Domínguez also welcomed the proposal: “I agree because, apart from the fact that cars can be high-end cars or even motorcycles, the reality is like this.” Anyone who buys a taxable vehicle to generate these funds has already paid other taxes and had a high tax burden.“.
Domínguez, executive director of SDC Asesores Tributarios, concluded: “People will have easier access to a caryou can take out a loan. If this proposal is adopted I think it would be very positive for the sector.”
On the other hand, The announcement put one of the most important premium brands on alertWHO They fear a certain weakening of demand until possible implementation. The main concern is that patents will decline while waiting for a price decline that may not happen if the law is not passed.
Notice in progress.
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