Argentina to slash corporate income taxes to 25 percent with reform

BUENOS AIRES (Reuters) – Argentina plans to cut corporate income tax to 25 percent by 2021 from 35 percent as part of a tax reform bill to be sent to congress in the coming days, Treasury Minister Nicolas Dujovne said on Tuesday.

The reform would also lower employer social security taxes, and Dujovne said the government was negotiating with provinces to reduce so-called gross income taxes, which economists say contributes to high consumer prices.

To offset the loss in tax revenue the government plans to implement a 15 percent capital gains tax on government bonds in foreign currency or indexed to inflation. The tax on peso-denominated bonds without adjustment clauses will be 5 percent, Dujovne said. The reform also includes higher taxes on alcohol and sugary drinks.

Overall, Dujovne said the reform would have a fiscal cost of 0.3 percent of gross domestic product per year for five years, but that would be offset by greater economic growth and lower tax evasion to make the proposed reform revenue neutral.

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