Sturzenegger clarification pours cold water on Milei’s 90% tax reduction claim

Deregulation & State Transformation Minister Federico Sturzenegger has downed the ante from President Javier Milei’s nationwide broadcast promise the previous evening to cut taxes by 90 percent. 

According to Sturzenegger, this did not imply a reduction of the overall tax burden for Argentines but rather a simplificación in administrative terms, with the idea being to have less taxes while collecting the most important.

“He was not talking about eliminating 90 percent quantitatively but in terms of the number of instruments,” explained the minister in a radio interview on Wednesday, the day after Milei broadcast a speech marking his first year in office.

“To lower the tax burden by 90 percent, we would have to slash spending by 90 percent. We have cut 30 percent, which is historic but he was talking about our having a very complex revenue structure with a whole bunch of petty taxes which bring in very little so now is the time to begin simplifying it and concentrating on the most important taxes,” Sturzenegger told on Radio Mitre, thus ruling out the idea that Milei’s message implied reducing the taxes collected in percentage terms.

In compensation, he interpreted that the five percentage points of public spending cuts in the first year of the Milei Presidency could be understood as an equivalent reduction in terms of taxes.

“Each government spending item is a tax which we Argentines have to pay,” the minister argued.

Sturzenegger also downplayed the competition of currencies, another key element in Milei’s nationwide broadcast.

“That was already in the DNU 70/2023 [mega-decree]. That freedom is already there with Argentines able to pick with which currency to operate,” commented the minister despite the President highlighting the previous evening that it formed part of a new stage of his administration.

“Argentines will be able to use the currency they want in their daily transactions. Every Argentine will be able to buy, sell and invoice in dollars or any currency they might consider, except the payment of taxes, which for now will continue being in pesos,” said Milei in his speech.

Meanwhile Sturzenegger, in sync with the President, emphasised the need to advance with a “deep chainsaw” against public administration ranks, just as they had highlighted on this and other occasions.

 “What we call the deep chainsaw is a matter of common sense – sitting down in each area, asking what people do and defining whether it makes sense that it be done by the national government and whether there is any corruption lurking behind,” was how he summed up the concept
 

– TIMES/NA