BUENOS AIRES: Argentina President Javier Milei has signed a new “tax innocence” law aimed at encouraging citizens to bring billions of dollars held outside the formal banking system back into circulation.
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For decades of high inflation and strict currency controls, Argentines converted pesos into US dollars and stored them at home or abroad. The government estimates around $251 billion in so-called “mattress dollars” are currently held outside banks, far exceeding the country’s foreign currency reserves.
The Milei administration hopes the new law will persuade people to deposit these funds, strengthening reserves and helping Argentina meet foreign debt obligations of about $19 billion due this year. The International Monetary Fund has also urged Buenos Aires to rebuild its depleted reserves.
Under the new legislation, Congress sharply raised the threshold for criminal prosecution for tax evasion to around $70,000 per fiscal year. It also shortened the statute of limitations for financial crimes and introduced a regime that exempts taxpayers from reporting changes in their net worth.
Economy Minister Luis Caputo said banks should immediately accept deposits made under the forgiveness scheme. He advised citizens to use the state-owned Banco Nación if private banks questioned the origin of their funds too closely.
Caputo said depositors would be able to freely access their dollars, either to spend or save, and earn interest like in other countries. The government hopes easier access and legal protection will restore confidence in the financial system.
Opposition figures, however, criticised the initiative, warning it could open the door to money laundering. Some lawmakers argued that relaxing reporting requirements risked attracting illicit funds, including proceeds from organised crime.
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President Milei had already launched a tax amnesty programme shortly after taking office in December 2023. That earlier scheme brought more than $20 billion into the banking system, although the funds were frozen in special accounts until now.
With the new law in effect, account holders are free to use their money, marking another step in Milei’s push to liberalise Argentina’s economy and stabilise its fragile finances.