Employers will pay less to the State for each job they create, so hiring will have lower costs
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The labor reform not only introduces changes in the employment regime, but also advances a deep simplification of the tax scheme associated with the employment relationship. The main objective is to reduce "non-salary" costs. This means those amounts that the employer had to pay to the State but did not translate into higher income for the worker.
In this context, the bill includes a series of tax incentives and reductions aimed at promoting investment, facilitating formal hiring, and improving the competitiveness of the productive sector.
The Government keeps that the positive impact on employment, production, and economic activity will allow for an expansion of the tax base in the medium term, although initially, revenue will decrease.
Investment incentives and reduction of corporate taxes
Se reduce la presión impositiva y aparecen los incentivos para crear empleo formal
One of the central pillars of the initiative is the creation of the Incentive Regime for Medium-Sized Investments (RIMI), intended for productive projects of up to USD 30 million. The scheme provides tax benefits such as early VAT refund and the possibility of applying accelerated depreciation in the Income Tax. These are key tools to improve profitability and reduce the financial cost of new investments.
In addition, the bill proposes a reduction in the corporate income tax rates. For fiscal years beginning in 2026, the general rate would decrease from 30% to 27%, while the highest rate would be reduced from 35% to 31.5%.
This is a clear signal to the private sector, aimed at encouraging the reinvestment of profits and the expansion of activity.
Elimination of distorting taxes and tax simplification
The text also advances the elimination of several Internal Taxes that currently apply to insurance, cellular and satellite telephone services, and luxury goods. They also apply to motor vehicles and engines, recreational or sports boats, and aircraft.
Added to this is the repeal of the cedular taxes on real estate and financial income. There will be an exception for digital currencies, and the elimination of the 10% charge on movie tickets intended for the financing of the failed INCAA. This is part of the measures that the Government highlights as part of the comprehensive redesign of the tax scheme.
Se eliminan impuestos distorsivos que se traducían a más costos para los trabajadores
According to the Argentine Institute of Fiscal Analysis (IARAF), if the bill is approved, the total number of taxes in Argentina would be reduced from 155 to 147. Meanwhile, at the national level there would be 37 taxes, 18% less than at present. This is a fact that reinforces the direction of simplification and fiscal order.
Fiscal impact and reduction of labor costs
The consulting firm Invecq estimated that the total fiscal impact of the complete bill would be 0.83% of GDP. Of that total, 0.5% of GDP corresponds to the reduction of employer contributions, the core of the labor chapter of the reform.
The remaining 0.33% is explained by tax incentives, mainly the reduction of the corporate income tax (0.2%) and the elimination of some Internal Taxes (0.1%).
In perspective, the accumulated fiscal surplus between January and October 2025 was 0.5% of GDP, which gives the Government room to move forward with this type of reform.
Javier Milei y Luis Caputo.
The consulting firm PxQ highlighted that the initiative involves a "significant reduction in non-salary labor costs". As an example, they pointed out that in a medium-sized industrial company with a monthly payroll of $100 million, the savings reach $12.33 million per month. This is equivalent to a 38% reduction in labor costs, not including the salary received by the worker.
Severance fund and long-term outlook
Regarding the Labor Assistance Fund (FAL) for severance payments, PxQ explained that "the State absorbs the cost of future dismissals through present tax waiver (defunding of SIPA)", since the fund will be formed with a monthly contribution of 3% of the remuneration that is currently allocated to employer contributions.
Se crea un Fondo de Asistencia Laboral
Meanwhile, Invecq stated that "the tax changes are welcome because they help simplify an excessively complex tax scheme." Although they clarified that a deeper reform is still pending regarding highly distorting taxes such as Gross Income, the check tax, or withholdings.
In line with the Government's vision, the focus of the reform aims to reduce the tax burden on formal employment, stimulate hiring, and generate a virtuous circle. This will generate greater activity, production, and, ultimately, higher genuine revenues for the tax system.
A strategy that prioritizes sustained economic growth over short-term revenue collection.
