by sorrel moseley-williams
Herald staff

A rise in the income tax threshold is reportedly on the cards next week, which would affect a considerable number of employees. Discussions are rumbling on once again with regards to raising the ceiling, which currently stands at 4,015 pesos a month for single employees and 5,554 pesos a month for those who are married. If the bar is raised, it would be the first such adjustment since 2008.
The past 10 days have seen some of the largest unions cement payrises for their members, namely the truck drivers’ union which secured a 25 percent increase, the metal workers’ union which took home a 21 percent increase and the food workers, who negotiated a 35 percent rise.
A 25 percent increase to the ceiling has been proposed, which would take employees up to 5,100 pesos and 6,850 pesos respectively.
According to economists, this rise would benefit around 600,000 private employees who would remain outside of the tax bracket, while another 550,000 would see their tax levels reduced on their salaries
The truck drivers’ union is headed by Hugo Moyano, who is also general-secretary of General Confederation of Labour (CGT), which has been pushing for modifications and a new threshold for some time.
Agreeing to a 25 percent salary rise on Tuesday, which its members will receive in three installments, the deal was signed by Labour Minister Carlos Tomada and Moyano.
The pay deal included a clause which the union must adhere to, which stipulated that it should “not ask, during the lifetime of the current agreement (which lasts a year), for another wage bargain reform or a salary percentage rise of the fixed amount.”
Although the truck drivers’ union agreed to this clause, which means they won’t be able to renegotiate for 12 months despite inflation concerns, the health workers’ union signalled it would not be taking that path.
Although INDEC, the official statistics bureau, had May’s inflation at 0.7 percent, independent economic consultancies said it was at least double that amount, going by the price of the average shopping basket.
Hugo Amor, head of the health workers’ union, said: “General discontent exists which has been generated by the rises given by the government for 2010. In August, after the final salary increase payment, a wage discussion needs to be initiated in order to compensate for the salaries eroded by inflation,” said Amor.
With regards to the possible change in the income tax threshold, economist Agustín Monteverde said: “Inflation has worked in such a way so that salary increases aren’t lost within the tax bracket. The taxable floor level increases and whoever earns that or less won’t be paying income tax.”
He added: “With respect to high inflation, which we have in Argentina, employees who don’t earn much in real terms end up paying in nominal terms due to wage increases and inflation. They therefore end up paying income tax although that doesn’t necessarily mean that they earn more than before.”
He explained who would win in financial terms should the government raise the ceiling. “There will be benefits for employees, mainly for those union members who have undertaken collective wage negotiations which have ended up with a rise higher than the rate of inflation. In some cases, I’ve seen very important rises, and if the minimum tax cap rises then those people who haven‘t reached that bar will have more money in their pockets,” added Monteverde.
Monteverde added: “Backdating the income tax ceiling will especially affect those unions with high salaries, such as truck drivers, mechanics, oil and bank workers, and freight ship captains. If it isn’t changed this month, some of these unions could lose almost all the the June payment of the 13-month salary.”
 Discussing the salary agreements reached on Wednesday, Minister Tomada said that the wage discussion “demonstrated to be the most democratic of employment insitutions” and highlighted that this year “has shown results not only for workers but also for employers.”
The income tax threshold is set to be finalised next week and would become law.