76 In 2016, the Argentine Congress passed Law 27,264 (Argentine Republic, 2016), which established benefits for SMEs by fully exempting them from the Minimal Notional Income Tax (1% alternative minimum tax on assets), crediting tax on financial transactions paid by SMEs (0.6% for debit and credit transactions for financial institutions), providing income tax credits equal to 9.7% of amounts invested in infrastructure projects and capital goods, and providing a frameworkof fiscal stability for SMEs (Ministry of Productive Development, 2021). In efforts to further progress tax reform efforts, Congress passed Law 27,451 in December 2019, along with Decree 99/2019, an executive order (Argentine Republic, 2019). This law reduced the corporate tax rate from 35% initially to 30% and then to 25% effective January 1, 2021 (Caracciolo & Fucinos, 2019). This reduction positions Argentina more competitively in the South American business market to attract more investors and entrepreneurs to fund or start businesses in the country. The most recent tax reform bill also includes a tax amnesty program for SMEs and an additional 10,000 Argentine pesos monthly deduction on payroll taxes for employers with fewer than 25 employees (Rodriguez &Magadan, 2020). While positive steps have been taken, these reforms have not significantly addressed the systemic barriers for small businesses in Argentina. The complexity of the current taxation structure makes it costly and inefficient to execute, thereby also making it ripe for reform. Argentina can look toward other neighboring countries to mimic successful tax reforms implemented there. Bolivia, for example, has gone through one of the most radical tax simplification reforms in recent years. Today, Bolivia’s tax is straightforward: personal income tax is set at 13%, corporate income tax is 25%, and there are no local taxes for individuals or corporations, the only exception being taxes for industries that tap into nonrenewable resources (PwC, 2021). The guiding principle in designing the procedures for the tax reform was simplicity, something that must be addressed as Argentina drafts future tax reform bills. Besides simplifying the tax structure, Argentina needs to focus efforts on converting its massive informal economy into the formal economy, further raising revenues for public expenditures. To do so, Argentina should look to the International Labour Organization (ILO). In 2015, the ILO introduced numerous guidelines on how to tackle informality and facilitate the transition into the formal sector. These new standards have three goals: to “facilitate the transition of workers and economic units from the informal to the formal economy, to promote the creation of enterprises and decent jobs in the formal economy, and to prevent the informalization of formal jobs” (ILO, 2015). The ILO Regional Office for Latin America and the Caribbean launched the Programme for the Promotion of Formalization in Latin America and the Caribbean (FORLAC) to generate analytical data and evidenced-based policy recommendations by partnering with governments, labor unions, and employers. Through advocating the need to reduce informality as a means to improving the working conditions and lives of the working people, FORLAC positions itself as a catalyst for productivity and growth. The FORLAC program provides advice and technical assistance in designing integration strategies, trains representatives to educate the general public, and generates a knowledge base for other countries to follow their lead in reducing informality (FORLAC, n.d.). The program has seen initial success in countries like Uruguay and Brazil. In Uruguay, a simplified collection scheme called Monotax has helped small contributors to integrate into the formal economy. Initial reports prove that Monotax has been an effective tool for the formalization of SMEs as well as for the extension of social security coverage for independent workers (Valverde, 2014). Brazil also has been implementing a national integrated policy framework to combat poverty through the rapid formalization of their country by targeting SMEs. Brazil has seen job creation in the formal economy that is three times as rapid as those in the informal economy (ILO, 2015). The ILO also promotes formalization through community-based microfinance institutions that are not as sophisticated as mainstream banks that consumers already have developed apathy toward. A program in another country may not be as effective in Argentina; however,
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