President Javier Milei has officially enacted a “fiscal innocence” bill, designed to incentivize individuals to deposit dollars hidden under mattresses or held in offshore accounts by offering a measure of tax evasion amnesty. In the context of prolonged high inflation and stringent currency controls, Argentines have increasingly opted to exchange their pesos for dollars, frequently choosing to store these dollars in cash at home. The government estimates that citizens are holding approximately US$251 billion in what are often referred to as “mattress dollars,” a figure that is six times greater than the Central Bank’s reserves, which were recorded at US$41 billion as of December 30.
Milei has embarked on an initiative to encourage citizens to deposit their greenbacks, thereby assisting the state in fulfilling its foreign debt obligations amounting to US$19 billion for the current year, as reported by the Congressional Budget Office. The International Monetary Fund, to which Argentina owes tens of billions of dollars, has urged the government to intensify its initiatives aimed at replenishing its diminished currency reserves. In December, Congress enacted legislation that significantly increased the threshold for tax evasion prosecution, raising it to the equivalent of US$70,000 per fiscal year in order to attract more deposits.
The legislation further shortens the statute of limitations, which defines the timeframe within which individuals can be held accountable for financial offenses, and establishes a new framework that relieves taxpayers from the obligation to disclose alterations in their net worth. Economy Minister Luis Caputo called on banks to promptly accept deposits from individuals enrolled in the forgiveness program. He recommended that citizens place their funds in the state-owned Banco Nacion should private banks inquire excessively about the source of the money. Depositing their dollars in the bank allows for immediate access, enabling individuals to either spend as desired or save to accrue interest, akin to practices observed globally,” Caputo noted on X.
Opposition leaders, however, cautioned that the initiative could transform Argentina into a hub for money laundering. “It transforms us into a haven for laundering dirty money and of laundering by drug-traffickers,” stated opposition Peronist lawmaker Jorge Taiana in a post on X. Milei initiated a substantial tax amnesty program shortly after assuming office in December 2023. The scheme resulted in an influx exceeding US$20 billion into the banking system. The funds remained in designated accounts until Friday, at which point the owners were granted the authority to manage them without restrictions.