Argentina Seeks to Legalize Billions in Unreported Funds
The libertarian administration under Argentine President Javier Milei intends to legitimize billions of dollars in unreported assets.
The government spokesperson, Manuel Adorni, stated that via a decree and proposed legislation, the capital control measures in the South American nation will be considerably eased.
The aim is to motivate savers to repatriate their funds, be they in currency form or stored overseas, back into the recognized economic framework.
“The economy requires increased liquidity. Achieving this will lead to sustainable growth,” stated Economy Minister Luis Caputo.
A broad spectrum of reporting duties to the tax authorities, such as those related to transactions, cash withdrawals, and the sale of properties and vehicles, is set to be eliminated.
“Once more, Argentinians are deemed innocent until the tax authorities provide evidence to the contrary. It’s your money, your choice,” stated Adorni.
Much of Argentina’s economy functions beyond the reach of the taxation system. Furthermore, up until quite recently, individuals were not allowed to amass significant quantities of dollars privately; hence, dollar savings were predominantly traded through unofficial channels.
It is estimated that Argentinians possess somewhere between $250 billion and $400 billion either as cash holdings or assets located overseas. The preference for these forms of investment stems from high inflation rates affecting the local currency, the peso, along with a lack of confidence in financial institutions. As such, many Argentinians have channeled their savings into U.S. dollars over recent years.
No other nation globally, apart from the United States, has as much currency circulating in the form of dollars as Argentina does.
Currently, the government aims to encourage savers to use their money for spending as a way to boost the faltering economy.
“If these resources are injected into the economy, they will result in a significant boost to the growth rate,” President Milei stated during a recent TV interview.
“It’s like a legalization of undeclared funds, but without paying taxes. It’s not about collecting taxes, but about making funds available. So that people can freely dispose of their money.”