Argentina: Selected Issues

December 29, 2017

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Format: Chicago

Argentina: Selected Issues, (USA: International Monetary Fund, 2017) accessed September 19, 2024

Summary

This paper discusses whether there is a more efficient way of taxing labor in Argentina that has a minimal cost in terms of foregone revenues. Social security contributions for dependent workers are generally high in Argentina, despite the plethora of different regimes and exceptions. A reform of labor taxation in Argentina would need to address these inefficiencies. Reducing the tax wedge would stimulate employment and formalization, especially if targeted to low-paid workers, as there is evidence that it’s their employment that mostly responds to tax incentives. Argentina’s tax and transfer system appears to be less progressive than the estimated optimal one. The simulations suggest that the proposed changes would have a positive impact on economic activity and formality, with a minor cost in terms of foregone revenues. Greater labor supply and wages in the formal sector push up revenue from labor taxation, compensating part of the direct cost of the reform.

Subject: Gender, Gender inequality, Labor, Labor markets, Labor taxes, Tax policy, Tax wedge, Taxes

Keywords: Australia and New Zealand, Cost, CR, Earner, Gender inequality, Gender wage gap, Global, ISCR, Labor markets, Labor taxes, Tax wedge, Wage, Wage agent, Wage distribution, Wage gender gap, Wage worker, Worker

Publication Details

Pages:

91
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2017/410
Stock No:

1ARGEA2017002
ISBN:

9781484335833
ISSN:

1934-7685

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