BUENOS AIRES, Feb 18 (Reuters) - Argentina doubled the threshold for paying personal income tax to 30,000 pesos ($2,000) per month from 15,000 pesos, President Mauricio Macri said on Thursday, responding to demands from labor unions to lighten the burden on inflation-hit workers.
The new policy comes as salary talks get started nationwide. Teachers, state employees and truckers among other unionized workers are demanding compensation for double-digit consumer price increases and the country’s sharply weaker peso currency .
“Income taxes plus inflation make it impossible (for some) to make it to the end of the month,” Macri said in a televised address. Elected in November on a free-markets platform, he started instituting reforms soon after his Dec. 10 inauguration.
Inheriting an economy beset by wide budget deficits, low cash reserves and weak private investment, he lifted trade and currency controls, prompting the peso to weaken by 34 percent to an all-time low of 15 per U.S. dollar.
Labor leaders welcomed Thursday’s tax policy changes but signaled a tough round of wage negotiations ahead, with workers demanding pay increases in line with inflation estimated by private economists at about 30 percent.
“It’s an important announcement but it’s not enough,” said Hugo Moyano, head of Argentine’s CGT umbrella labor organization.
Macri’s election showed a sharp break from the policies of previous leader Cristina Fernandez, who nationalized the country’s main airline and energy company while imposing heavy market controls during her eight years in power.
Reporting by Hugh Bronstein, Juliana Castilla and Gabriel Burin Editing by W Simon