Argentina’s President Javier Milei announced on Wednesday that his administration plans to implement a structural tax reform, aiming to eliminate 90% of existing taxes by 2025.
This announcement comes one year after Milei took office on December 10, 2023, becoming the country’s first libertarian president, following socialist Alberto Fernández. In response to a struggling economy and the threat of hyperinflation, Milei has introduced a series of drastic “shock therapy” measures.
Milei’s policies have led to a significant drop in inflation, decreasing from 25.5% in December 2023 to just 2.7% by October 2024. The country has also enjoyed ten consecutive months of trade surpluses as of November.
Marking his first year in office, Milei delivered a 35-minute speech on Tuesday.He reaffirmed his commitment to economic reforms throughout 2025, highlighting a “structural tax reform” that aims to drastically cut national taxes while restoring tax autonomy to Argentina’s provinces.
Under the new plan, Argentines will have the freedom to use any currency for everyday transactions. This freedom of choice poses a direct challenge to the peso’s monopoly and the central bank’s authority over the economy.
Additionally, Milei is seeking to negotiate a free trade agreement with future Trump administration, signaling a departure from the restrictions of the Mercosur trade bloc. This could pave the way for new markets for Argentine exports and attract foreign investment.
Despite these ambitious reforms, Milei faces significant challenges, as poverty currently affects 57% of the population. Nevertheless, he maintains that short-term sacrifices will lead to sustainable economic growth by dismantling the barriers that have hindered Argentina’s progress.
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