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Regularization of cryptocurrencies is eliminated in Argentina’s Milei economic reform

The provision pertaining to the regularization of assets has been eliminated from the Law of Bases and Starting Points for Argentine Freedom.

Javier Milei, the president of Argentina, has decided to eliminate cryptocurrency tax proposals from a contentious comprehensive reform package. This is a calculated strategy aimed at facilitating the endorsement of the comprehensive reform package and circumventing protracted discussions on subjects that he considers less crucial.

The asset regularization clause proposing a one-time tax on various types of previously undeclared assets has been removed from the Law of Bases and Starting Points for the Freedom of Argentines, an omnibus bill intended to launch Milei’s policy agenda, according to an Argentine tech-focused publication, iProUP, which reported on January 27.

This section of the bill proposed a simple 5% tax on all assets, payable by the end of March 2024; an additional 10% tax from April to June 2024; and a 15% tax from July to September 2024. Legitimizing cryptocurrency holdings, notwithstanding their past-due tax declarations, was not included in the ambitious reform package introduced in the Argentine parliament by the new administration of self-proclaimed libertarian President Javier Milei.

The rationale behind the elimination of the asset regularization provision from the bill, as stated by the Minister of the Interior, Guillermo Francos, was that it “prolonged the treatment” of the initiative in parliament.

Originally referred to as the “Law of Bases and Starting Points for the Freedom of Argentines,” the “Ley Ömnibus” measure stipulated that taxpayers were obligated to disclose ownership of assets, including cryptocurrencies, that they had not previously disclosed. Minister of the Interior Guillermo Francos, in eliminating those clauses, stated, however, that legislative efficacy and swift economic development are of greater importance.

The ramifications of the legislative reversal for holders of cryptocurrencies in Argentina continue to be a subject of apprehension and uncertainty. It appears that neither holding nor transacting with cryptocurrency is taxable, but selling substantial quantities for a profit is.

Speculative cryptocurrency investors will perceive this legislative change with increased complexity. From one perspective, the decision rendered by the government mitigates immediate apprehensions regarding the possible escalation in tax responsibilities linked to the Ley Ömnibus. Conversely, this highlights the dynamic and occasionally precarious characteristics of cryptocurrency taxation and regulation.

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