Brazil-inspired proposal for Federal 9% ‘Super VAT’ to unify VAT, Gross Income Tax and Municipal Tax; additional Provincial VAT layer on top
As Argentina intensifies efforts to simplify its tax system and maintain fiscal balance, a new proposal called “Super VAT” has gained attention. Introduced by Osvaldo Giordano, president of the IERAL at the Mediterranean Foundation and former head of ANSES, the proposal seeks to unify three major taxes:
- Value Added Tax (VAT);
- Gross Income Tax IIBB; and
- Municipal Levies
A Federal Súper IVA of 9% would be set, allowing municipalities to add further local taxes like Brazil – or India and Canada – models. The collection of this “Super VAT” would continue to be the responsibility of the national treasury, which would then have to distribute the funds corresponding to each province.
President Milei ready to take-up VAT reform?
Reforming President Milei is known to want to reform VAT, including a new federal and provincial split. But the Provinces are known to be resistant to changes as they fear on losing out. Any VAT reforms would need Congress approval.
A VAT and wider tax reform bill is expected before summer 2025.
The concept is inspired by recent Brazil VAT reforms and by pilot programs in Córdoba province aimed at streamlining compliance for small taxpayers. According to Giordano, consolidating these overlapping taxes would dramatically simplify the country’s complex tax landscape, reduce distortions, and increase efficiency. The reform envisions that tax collection would be centralized at the national level, with funds redistributed to the provinces through a modified Federal Co-participation Law, which would require strong political consensus.
The rationale for the “Super VAT” stems from the current concentration of tax revenues. According to the Argentine Institute of Fiscal Analysis (IARAF), just six national taxes account for 83% of total public revenue, with VAT alone contributing 32.8%. In 2024, VAT revenue totaled $131.3 trillion, marking a year-on-year increase of 205.6%. The data underscores the dominance of a few taxes in national collections and the potential for greater efficiency through consolidation.
Despite its appeal among economic analysts, the proposal has not yet been embraced by the Argentine government. Economy Minister Luis Caputo clarified via social media that the “Super VAT” is not under current consideration, stating that the government has not received a formal proposal from Giordano or the Mediterranean Foundation.
Nevertheless, the proposal aligns with the Milei administration’s broader tax reform agenda, which aims to eliminate up to 90% of existing taxes and retain only six essential levies. Although not yet on the government’s agenda, the “Super VAT” proposal continues to generate discussion in policy circles. Supporters argue that a unified VAT model could reduce the administrative burden for businesses, improve compliance, and increase tax transparency. However, critics highlight the political and logistical challenges, particularly regarding intergovernmental fiscal coordination and legal reforms required to alter revenue-sharing frameworks.
In summary, while the “Super VAT” is not officially endorsed, it reflects growing momentum toward deep tax reform in Argentina, driven by the need for simplicity, efficiency, and sustainability in public finance.
