Government announced measures for small and medium-sized companies

The first measure is a modification of the fictitious IRAE regime, going from a fixed rate scheme according to income level to a progressive rate scheme (a regime similar to Personal Income Tax, something long requested by these companies). The benefit covers 37% of IRAE taxpayers (Income Tax from Economic Activities) which are approximately 26,600 small businesses.

Another is for companies that have revenues greater than 305,000 Indexed Units ($1,727,032) in a year. In this case, they should not necessarily remain as cIRAE taxpayer in the next two exercises. There the impact will be for 2,700 small companies.

The third measure is a increase in the income cap to be Imeba taxpayers (Tax on the Alienation of Agricultural Goods). The cap will go from 2 million Indexed Units (UI) to 2.5 million UI ($14.1 million).

The fourth is a forgiveness of debts to monotributistas Mides. In this case, the measure covers the debts generated since March 2020 by monotributistas who are ex officio suspended in the Banco de Previsión Social (BPS), until the date of promulgation of the law.

The government estimate is that the announced measures will generate a $40 million tax waiver.