Argentina’s government said Thursday it had sent a new bill to Congress as part of its sweeping “mattress dollars” plan to persuade citizens to bank the hundreds of billions of dollars in cash they have stashed in their homes, as well as in safety deposit boxes and offshore accounts.
At a Casa Rosada press conference announcing the ‘Ley de Principio de Inocencia Fiscal,’ (or the Fiscal Presumption of Innocence bill) La Libertad Avanza national deputy José Luis Espert declared that “there will be no more persecution” of Argentines holding undeclared dollars “as if they were Al Capone.”
Over years of high inflation and currency controls, Argentines traded their battered pesos for dollars, which they often hoarded at home, in cash.
As part of a plan to buttress the peso by increasing the amount of dollars in circulation, Milei now wants citizens to spend or deposit their greenbacks and undeclared foreign currency.
Milei’s government has formally christened his scheme “Plan de Reparación Histórica de los Ahorros de los Argentinos” (“Historical Reparation Plan for Argentines' Savings”)
Espert, who serves as the chair of the lower house Budget Committee was joined at the Casa Rosada by the head of the ARCA tax bureau, Juan Pazo, who provided further details of the bill.
It has already entered Congress and is expected to be debated in the coming weeks.
Threshold raised
Pazo said the bill had two main goals. The first involves changes to tax rules, specifically raising the thresholds for triggering evasion investigations.
“Until now, in Argentina, you could be treated as a petty tax evader for a discrepancy of just 1.5 million pesos [around US$1,200 at the official exchange],” said Pazo, a level he described as “utterly absurd.”
“From now on, these thresholds will be significantly raised. Of the 7,000 active cases in the tax criminal court, only 200 will remain, as these involve substantial and genuine tax evasion,” said Pazo.
The statute of limitations for ARCA’s tax assessments will also be reduced from five to three years, “provided citizens or businesses have filed their tax returns correctly and on time,” Pazo said.
“Anyone who fails to do so and is notified will be able to settle matters by paying their dues. Under the new framework set out by this law, tax issues will be resolved through payment. We’ll provide citizens with all the mechanisms necessary to regularise their tax status without facing criminal charges.”
Cabinet Chief Guillermo Francos confirmed earlier Thursday that the Executive has submitted a bill to ensure legal certainty around the use of undeclared savings of up to 50 million pesos by individuals.
“It’s a law with multiple components, including changes to existing regulations, thresholds for the application of criminal economic law, and statutes of limitation. It covers a variety of measures aimed at ensuring that people who spend their own money – their savings – are not penalised under previous legislation,” Francos explained.
New scheme
The second goal is to “permanently shield” participants who join the new tax scheme (Régimen Simplificado del Impuesto a las Ganancias,” or “Simplified Income Tax Regime.”) introduced by President Javier Milei’s government.
Pazo declared that “Argentines who have protected their money from politicians for years” will now be able to join the scheme.
“This regime represents a major shift in Argentina’s tax system. People who opt in will be able to regularise their financial situation by paying income tax based solely on their invoiced earnings, regardless of changes in their assets,” Pazo confirmed.
For those joining the new scheme, the official explained, ARCA will assess income tax liabilities “solely on reported earnings for the relevant period, regardless of any increase in net worth or personal spending.”
“To give an extreme example: if, in a single fiscal year, someone purchases five properties, ARCA will only tax them based on declared income minus deductible expenses. This law ensures that no future administration can target them,” Pazo explained.
Pazo added that the bill will ensure no future government can target Argentines for their wealth: “No administration, regardless of political affiliation, addicted to persecution, will be able to treat decent Argentines like criminals ever again.”
“We call on the people to join this new regime: sign up, pay, and forget about it,” Pazo concluded.
Sign ups
Pazo emphasised that the steps would allow thousands of Argentines to regularise their financial affairs.
The ARCA tax chief also revealed that 13 provinces and Buenos Aires City have already signed up the new rules, with the two more set to join next week.
Espert issued a warning to the provinces yet to sign up: “It is now in your hands whether to return freedom to your citizens, or to persist with this perverse system that has caused so much harm to our country.”
In line with the government’s broader strategy of cutting red tape and facilitating investment and asset acquisition, the Financial Information Unit (UIF) money-laundering watchdog announced updated thresholds for cash transactions and activity in the automotive and property markets.
The threshold for cash bank deposits without requiring depositor identification has been doubled to the equivalent of around US$10,000 at the current exchange rate.
Regulations governing the National Motor Vehicle Registry have also been updated. From now on, proof of origin for funds will only be required for transactions exceeding 115 million pesos (approximately US$100,000).
– TIMES/NA/PERFIL
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