Skip to main content

Judges May Have To Pay Income Tax In Argentina

By | [email protected] | December 21, 2016 2:05pm

Court employees protesting against the possibility of paying the income tax in June. Photo via Telam
Share

As the final debate on the income tax bill looms over Congress, a new pleasant detail — besides the fact we might finally get to stop talking about taxes — surfaced today: if passed as it currently stands, the bill will have national and provincial judges start paying income tax.

This has been a long-standing demand for many that had always been rejected by both the magistrates and members of the other state branches.

However, despite the good news, there are two downsides: first, only judges appointed from January 1, 2017 onwards will start paying tax on their earned income. The tax is not retroactive, meaning it can’t reach those included in the prior system. And since judges have the tendency to stay in office for decades, the number of those paying income tax will increase very gradually.

Secondly, the rest of court’s employees — also only those hired from 2017 onward — who earn more than what the new tax floor establishes, will have to pay it too. It makes sense that some court staffers who have a similar standing in the hierarchy as judges – such as prosecutors – should pay. However, lower ranking employees will also have to pay up despite the fact the rallying cry of the opposition and unions when pushing for the reform was “salary is not profit.”

Court employees protesting against the possibility of paying the income tax in June. Photo via Telam

Court employees protesting against the possibility of paying the income tax in June. Photo via Telam

This debate has taken place on several occasions, and especially throughout this past year during when income tax was often in the spotlight, and different voices in court have already weighed in on the possibility. Some in favor, some against.

Supreme Court Justices Ricardo Lorenzetti and Elena Highton de Nolasco gave the initiative an important endorsement when they backed it earlier this year after PRO Deputy Pablo Tonelli presented a special bill concerning this issue in particular: “at the [Supreme] Court we are all in favor of judges paying income tax,” said Lorenzetti of the ruling that ended up not going through.

However, the stance of the highest court in the country wasn’t always so sympathetic. In fact, the Court itself — with a completely different composition back then, it’s fair to say — issued a ruling dismissing a law that would have made it compulsory for them to pay the tax in 1996 .

The argument? “The intangibility of compensation for judges is not a privilege but a guarantee, established by the Constitution in order to ensure the independence of the Judicial Branch.” Basically, that they had to make a lot of money and not pay taxes to prevent themselves from falling into temptation and accepting bribes.

Other court employees had already spoken out against paying the tax in June. They used the same argument as the Supreme Court did 20 years ago, and added that inflation also affected them too. Moreover, they pointed out the fact that, apart from academic offices, they can’t make money by any other means due to the potential conflict of interests.

“There are judges who have held office for 20 years but earn less than AR $40,000 a month. A significant reduction would lead to them leaving their posts,” warned Rafael Gutierrez, President of the Federal Board of Courts.