Economy Minister Sergio Massa announced tax relief measures for self-employed workers and small and medium enterprises on Friday.

The minister blamed this year’s drought and August’s IMF-imposed currency devaluation for causing an economic situation that affected “people’s purchasing power, their pockets, and the economic development capacity of millions of Argentines.” Massa, who is also ruling coalition Unión por la Patria’s presidential candidate, announced the measures at the Professional Council of Economic Sciences in Buenos Aires.

In the case of small business owners and self-employed workers in the tax regime for higher earners (known as autónomos), payment of certain kinds of tax through the end of the year will be deferred. The threshold at which they start paying income tax will be increased from AR$16,830 (US$46 at the official rate and US$24.7 at the MEP rate) per month to AR$160,000/month. That measure will affect 701,000 people.

Massa also announced measures for people in the monotributo system, a simplified tax regime for informal workers, cooperative workers and self-employed people with lower earnings. They will no longer be suspended from the system if they exceed the maximum earnings threshold or if they fall behind on their payments. 

SMEs with debts will also be entitled to a 120-month payment plan with a 4.14% monthly interest rate.

Massa stressed that SMEs provide around 68% of Argentine jobs and said that debt regularization will allow the productive sector to “catch up with the AFIP [tax bureau].” He added that the measure would benefit around 300,000 SMEs.

“We are faced with the absurdity that there are multinationals that pay less tax than an SME in Rafael Calzada [a town in Buenos Aires province],” he said. “And that is a distortion that we have to correct based on looking again at which tax benefits are approved in the budget.” 

In the draft 2024 budget bill, Massa included an addendum stating that tax benefits account for 4.7% of the country’s GDP.

On August 14, one day after the primary elections in which libertarian economist Javier Milei obtained the most votes, the government devalued the peso by 22%. Inflation that month was 12.4%, the highest in 32 years.

Massa started to announce relief measures the following week, including price freezes and VAT refunds for basic goods.

Over 3.3 million people have received the VAT rebate so far, according to Massa. He added that he would submit a bill to Congress on Monday aiming to make the new scheme permanent.