Argentina’s Milei Administration Reverses Course on Crypto Tax Benefits Law

Argentina’s President Javier Milei has decided to remove proposed crypto tax law from a controversial omnibus reform package in a bid to expedite the approval of a set of reforms.

The bill, known as the “Ley Ómnibus” or the “Law of Bases and Starting Points for the Freedom of Argentines,” initially included provisions that required taxpayers to declare ownership of previously undisclosed assets, including cryptocurrencies. 

However, Minister of Interior Guillermo Francos announced the removal of these clauses, citing the need for rapid economic development and legislative efficiency as the driving factors behind the decision.

“The tax part was smaller and delayed treatment,” Francos stated, emphasizing the government’s focus on achieving consensus on more agreeable aspects of the bill.

Removal of Crypto Tax Law Creates Concern and Confusion

The removal of proposed cryptocurrency taxes has created a sense of concern and confusion regarding the implications and taxation of cryptocurrencies in the country.

Marcos Zocaro, an accountant knowledgeable about the matter, told local news outlet iProUP that holding and using cryptocurrencies for payment will not be subject to taxation.

However, he said selling significant amounts of cryptocurrencies at a profit will incur income tax. There is also a threshold below which no tax is due.

The removal of the crypto tax from the omnibus bill is part of a broader strategy by the Milei administration to address public pushback, national strikes, protests, and criticism of the initial proposals.

#Argentina: Thousands of protesters are currently in a face off with hundreds of riot police in front of the Congress of Argentina in Buenos Aires as lawmakers debate new President Javier Milei's large bill that would reform politics, the economy and aspects of private life. pic.twitter.com/rFvXUd8T8a

— UNICORN RIOT (@UR_Ninja) February 1, 2024

The primary goal of the Ley Ómnibus is to introduce comprehensive economic, social, and administrative reforms aimed at fostering economic development and freedom.

The bill’s extensive scope and radical reforms across various sectors, including defense, capital amnesty, tax moratoriums, personal asset taxation, public works, pension systems, labor formalization, privatization of state-owned companies, export taxation, energy sector regulations, mental health, education, environmental laws, administrative restructuring, and even new divorce procedures, have sparked significant debate and concerns.

Critics Express Concern About Milei’s Bill

Critics have argued that the bill’s broad scope and radical changes could potentially undermine Argentina’s democratic framework, which has been cultivated over the past four decades, specifically regarding Argentina’s crypto tax laws.

Key concerns revolve around the bill’s impact on human rights and democratic institutions, as per reports from local outlets. 

Some have also claimed that the bill seeks to dismantle essential procedures and implement regressive measures affecting basic necessities such as food, housing, and healthcare access.

The bill’s deregulatory nature is also seen as a potential threat, as it may lead to the privatization of essential public services without adequate safeguards to ensure quality and affordability.

Another contentious issue is the bill’s approach to law enforcement and public demonstrations.

Critics argue that the bill’s punitive stance on social protests redefines social dissent as a crime against public order, potentially subjecting a wide range of meetings and gatherings to new restrictions and offenses.

Given that Milei’s party holds a minority in Congress, the bill is likely to face resistance, which explains the administration’s willingness to make concessions in certain areas.

The Congress has until February 15 to determine the fate of the bill.