On Thursday, Argentina’s government announced the submission of a new bill to Congress, which is a component of its extensive “mattress dollars” initiative aimed at encouraging citizens to deposit the substantial amounts of cash they currently hold in their homes, safety deposit boxes, and offshore accounts. During a press conference at Casa Rosada, national deputy José Luis Espert of La Libertad Avanza introduced the ‘Ley de Principio de Inocencia Fiscal,’ or the Fiscal Presumption of Innocence bill. He asserted that “there will be no more persecution” of Argentines possessing undeclared dollars “as if they were Al Capone.”
Over years of elevated inflation and stringent currency regulations, Argentines exchanged their devalued pesos for dollars, which they frequently stored at home in cash form. In an effort to strengthen the peso through an increase in the circulation of dollars, Milei is now encouraging citizens to either spend or deposit their greenbacks and undeclared foreign currency. Milei’s administration has officially named his initiative “Plan de Reparación Histórica de los Ahorros de los Argentinos” (“Historical Reparation Plan for Argentines’ Savings”).
Espert, chair of the lower house Budget Committee, was accompanied at the Casa Rosada by Juan Pazo, head of the ARCA tax bureau, who elaborated on the bill’s specifics. The proposal has already been introduced in Congress and is anticipated to undergo debate in the forthcoming weeks. Pazo articulated that the legislation was designed with two primary objectives in mind. The initial aspect pertains to modifications in tax regulations, particularly increasing the thresholds that initiate investigations into evasion. “Until now, in Argentina, you could be treated as a petty tax evader for a discrepancy of just 1.5 million pesos, a level he described as utterly absurd,” said Pazo. “From this point forward, these thresholds will be considerably elevated. “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 be reduced from five to three years, “provided citizens or businesses have filed their tax returns correctly and on time,” Pazo stated.
“Anyone who fails to do so and is notified will have the opportunity to resolve the situation by settling their outstanding obligations. Under the new framework established by this legislation, tax matters will be addressed through payment mechanisms. We will furnish citizens with all the requisite mechanisms to regularize their tax status without the risk of incurring criminal charges. Cabinet Chief Guillermo Francos confirmed earlier Thursday that the Executive has submitted a bill aimed at providing legal certainty regarding the utilization of undeclared savings amounting to 50 million pesos by individuals. “This legislation encompasses various elements, such as modifications to current regulations, criteria for the enforcement of criminal economic law, and provisions regarding statutes of limitation. “It encompasses a range of initiatives designed to guarantee that individuals utilizing their own funds – their savings – are not adversely affected by prior legislation,” Francos elucidated.
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 stated that “Argentines who have protected their money from politicians for years” will now be able to join the scheme. “This regime signifies a substantial transformation in Argentina’s tax framework. Pazo confirmed that individuals who choose to participate will have the opportunity to regularize their financial circumstances by paying income tax exclusively on their invoiced earnings, irrespective of any fluctuations in their assets.
For individuals participating in the new scheme, the official clarified that ARCA will evaluate income tax obligations “solely on reported earnings for the relevant period, regardless of any increase in net worth or personal spending.” “To provide a stark illustration: if, within a single fiscal year, an individual acquires five properties, ARCA will impose taxes solely on the declared income after accounting for deductible expenses.” Pazo explained that this law ensures protection from targeting by any future administration. Pazo stated that the bill will guarantee that no future government can target Argentines based on their wealth: “No administration, regardless of political affiliation, addicted to persecution, will be able to treat decent Argentines like criminals ever again.”
“We urge the populace to embrace this new regime: enroll, contribute, and move on,” Pazo concluded. Pazo underscored that the measures would enable thousands of Argentines to formalise their financial situations. The ARCA tax chief indicated that 13 provinces along with Buenos Aires City have already adopted the new regulations, with two additional provinces expected to comply by next week.
Espert cautioned the provinces that have not yet committed: “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 accordance with the government’s overarching strategy to reduce bureaucratic obstacles and promote investment and asset acquisition, the Financial Information Unit (UIF), which oversees money-laundering activities, has announced revised thresholds for cash transactions and activities within the automotive and property sectors.
The limit for cash bank deposits that do not necessitate depositor identification has been increased to approximately US$10,000 at the prevailing exchange rate. The regulations pertaining to the National Motor Vehicle Registry have been revised. Henceforth, verification of the source of funds will be mandated solely for transactions that surpass 115 million pesos (approximately US$100,000).