Milei eyes 'mattress dollars' as 'fiscal innocence' bill wins approval

President Javier Milei secured a second end-of-year victory in Congress on Friday as Argentina’s Senate approved a so-called ‘tax innocence’ bill aimed at legitimising undeclared cash holdings and savings.

The ‘Fiscal Innocence’ bill, already approved by lawmakers in the lower house Chamber of Deputies, won the backing of 43 senators, with 26 voting against.

The measure forms part of a broader push by the Milei administration to persuade citizens to deposit the hundreds of billions of dollars believed to be held outside the formal financial system, whether stashed in homes, safety deposit boxes or offshore accounts.

The Milei administration hopes the initiative will encourage Argentines to bring their so-called ‘mattress dollars’ – a local term for savings kept outside the banking system – into the formal economy.

The bill, which is expected to be signed into law shortly, establishes a “simplified income tax regime” under which, according to the government, taxpayers who opt in will be “shielded for life.”

The legislation amends the Tax Criminal Regime (Law 24,769), the Tax Procedures Law (Law 11,683) and the Civil and Commercial Code, while also creating a new ‘Simplified Sworn Statement’ regime.

Under the new framework, which applies only to taxpayers with assets of up to 10 billion pesos, participants will not be required to report changes in their wealth, nor will their spending be monitored.

The ARCA tax and customs revenue agency will levy income tax solely on declared income, regardless of any increase in assets, which will not be scrutinised.

The Fiscal Innocence bill raises the threshold for the criminal offence of simple tax evasion from 1.5 million pesos (around US$1,033 at the official exchange rate) to 100 million pesos (around US$69,000).

For cases classified as ‘aggravated’ tax evasion, the threshold is lifted from 15 million pesos (approx US$10,500) to one billion pesos (around US$689,000)

The statute of limitations for tax offences will also be reduced from five to three years.

Under the new rules, ARCA will refrain from bringing criminal proceedings provided outstanding debts and accrued interest are settled, although this benefit may be used only once per taxpayer.

If a complaint has not yet been formally filed, it will be extinguished if the taxpayer settles the liabilities by paying an additional 50 percent within 30 working days of notification of the charge.

Article 39 of the bill “establishes the exonerating effect of payment, provided the content of the sworn statement proposed by ARCA is accepted and payment is made on time, except where income has been omitted.”

Although the bill generally loosens tax controls, it increases the financial penalties for late filing of sworn statements.

– TIMES/NA