Following the approval of the Ley Bases, the Senate also approved the fiscal package as a general item early Thursday morning, with 37 votes in favor and 35 against. Among its most significant features are a fiscal amnesty and a tax moratorium, which were approved unanimously when they were voted as individual chapters. 

This second legislative win for the government was not complete, however, as two key provisions were struck down: a lower income tax threshold and cuts to taxes on personal assets. 

It was known that the income tax legislation vote would be tight, but the defeat regarding personal asset taxation came as a surprise to the government, which will now try to get both reinstated in the Lower House.  

Income tax

The government was looking to modify the income tax threshold after Economy Minister Sergio Massa raised it in 2023. The current starting point for income taxation is aimed at people that earn the equivalent of 15 minimum vital wages (SMVM, for its Spanish initials), for a total gross income of AR$3,5 million (US$3,800 at the official rate, US$2,745 at the MEP rate) .

If the proposed legislation had been approved, the threshold would have been lowered to gross earnings of AR$1,8 million (US$1,954, US$1,411) for singles and AR$2,34 million (US$2,540, US$1,835) for married couples with two children. 

Taxation would have started at 5% of total income and gone all the way to 35%, depending on an individual’s earnings. The legislation would have affected an additional 1 million workers. 

The government made changes in order to get it approved. Specifically, they raised the threshold by 22% for Patagonia provinces, including Santa Cruz, Chubut, La Pampa, Neuquén, Río Negro, and Tierra del Fuego. The move didn’t work, as all the Patagonia lawmakers but Pablo Blanco (UCR, Santa Cruz) and Lucila Crexell (Movimiento Popular Nequino, Neuquén) voted against it. 

The final tally was 31 in favor and 41 against. 

Personal assets

The fiscal package approved by the Lower House increased the personal asset threshold at which a person would begin getting taxed. The legislation proposes that the starting point be raised from the current AR$27 million to AR$100 million. The proposal also lowered the taxation rate. While the current legislation establishes a limit of 1.75%. the government intended for a progressive system, starting at 0.5% and ending at 1.5%. 

The final tally in the Senate for this chapter was 37 votes in favor and 35 against.

Due to the changes made to the Ley Bases and the fiscal package, both bills will now return to the Lower House for final approval, with the administration betting on deputies to reinstate both provisions. 

Per Argentine constitutional law, the reviewing body (in this case, the Chamber of Deputies) can overturn a decision made by a second chamber if it can gather the same vote percentage. The Lower House would only need a simple majority to reinstate the two chapters.