Key drivers of tax policy change
The new Government, which took office in December 2015, has indicated their intention to progressively reduce the tax burden for companies and individuals in order to make the country more competitive, and has in practice taken some measures in this regard (such as the elimination of export duties and abrogation of tax on dividends).
Toward the end of 2016, a tax reform package was approved, which reduced the burden of income tax for individuals (through the update of tax deductions and tax scales) — a measure that has been vastly discussed in the country.
However, the significance of the public expenditure and the difficulties that the Government has had to reduce it for many reasons, have made it clear that the reduction of taxes will not be easy and will take a long time.
The multiplicity of taxation levels (federal, provincial and municipal), along with the lack of an updated co-participation system, continues to present a significant issue. The new Minister of Treasury, appointed in December 2016, has recently indicated that one of his priorities will be the reduction of public deficit and the reordering of the taxation system.