Argentina's Scioli pledges middle-class tax cut ahead of election

Reuters News
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Posted: Oct 22, 2015 5:00 PM

BUENOS AIRES (Reuters) - Argentina's ruling party presidential candidate Daniel Scioli on Thursday promised to increase the threshold at which people start paying income tax, a move sure to be popular among middle class voters ahead of Sunday's election.

Scioli, who is ahead in opinion polls but cannot be sure of an outright win, said that Argentines earning less than 30,000 pesos ($3,153) per month would be exempt from income tax if he wins. The current threshold is 15,000 pesos per month.

Scioli's main challenger in the presidential race is Mauricio Macri, the business-friendly mayor of Buenos Aires city whose bedrock of support is the urban middle and upper class. Macri already has said he would scrap income tax for workers.

"A worker or retired person with income of less than 30,000 pesos will not have to pay this tax," Scioli said in a statement.

Scioli said more than half a million people would benefit from the measure. Scioli is backed by outgoing leftist President Cristina Fernandez, who is popular with the poor and low-income workers for her generous social welfare programs.

The tax cut addresses a key complaint from labor unions: that the tax burden on workers has increased as wages rise to keep pace with high inflation. Private economists estimate Argentina's inflation rate at about 25 percent.

The candidates' tax pledges raise questions over how either would tame a widening fiscal deficit.

(Reporting by Maximiliano Rizzi, Writing by Hugh Bronstein; Editing by Paul Simao)