Tuesday, April 16, 2024

ARGENTINA | 13-12-2023 14:17

Four issues for Caputo to clarify: utilities and subsidies, pensions, tax, agricultural duties

Argentina’s economy minister announced the first economic measures of Javier Milei’s new government on Tuesday – but did not provide details on a number of key moves.

Argentina’s new Economy Minister Luis Caputo delivered a series of striking announcements on Tuesday, unveiling the first of a series of emergency economic measures designed to drag the nation out of crisis.

However, the incoming official’s announcement – delivered via a pre-recorded video and without a press conference – left behind many several pending questions that will require clarification from Javier Milei’s government. 

One of the key issues concerns the elimination of subsidies for energy and public transport. Although Caputo said there would be a gradual reduction, he did not specify the percentage or the timeframe. 

This information is key for users to be able to foresee how it will impact their pockets.

Another unanswered question addresses pensions and the retired, especially the updating of payments via the ‘movilidad jubilatoria’ scheme. Retirees are on alert over how much their pensions will be affected by Milei’s cost-cutting plans – it is understood his new administration will ask Congress to suspend a rule that automatically updates payments as part of its bit to shave 0.4 percent of GDP off spending on pensions.

Likewise, the minister must clarify the new income tax (‘Ganancias’) scales and if those exempted from paying last year by the previous government will now be required to contribute once again. Although Caputo announced tax relief, he did not detail the new ranges.

Finally, the agricultural exporting sector is awaiting clarification as to whether the government will increase duties on their products. Caputo made no specific mention of the issue, generating uncertainty among producers, but the government is expected to raise them.



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