President of Argentina Javier Milei announced Wednesday that his administration is preparing a structural tax reform that will eliminate 90 percent of existing taxes in 2025.
Milei announced the plan, alongside other policies he seeks to implement in his second year in office, while marking the end of his first. Among them was a plan to negotiate a trade deal with President-elect Donald Trump’s administration once he takes office in January.
Tuesday marked one year since Milei took office on December 10, 2023, and became Argentina’s first libertarian president, succeeding socialist former President Alberto Fernández. At the time he took office, Argentina faced a severe economic crisis that dramatically worsened as a result of Fernández’s disastrous socialist policies. Milei implemented a series of drastic “shock therapy” measures to avert the collapse of the country’s economy and avoid a hyperinflation spiral.
Milei’s policies successfully reduced the inflation rate in Argentina, dropping it from 25.5 percent in December 2023 to 2.7 percent in October 2024 while also allowing the nation to experience ten months of continued trade surplus as of November.
Additionally, Milei spearheaded a dramatic overhaul of the Argentine government during his first year, reducing the number of ministries from 18 to nine on his first day and outright replacing other institutions — such as Argentina’s bloated AFIP revenue service, which was dissolved and substituted with a much smaller agency in November. The Argentine president also introduced a series of sweeping reforms that Congress passed in late June.
Milei marked his first year in office by delivering a speech in the evening hours of Tuesday in the company of his ministers and members of his administration. He reviewed the results of his policies and announced a series of upcoming measures.
In his roughly 35-minute speech, Milei thanked Argentines for electing him and for “having endured, as you did, the hard months we had at the beginning of our administration,” assuring that their sacrifice “will not be in vain.”
“There is a saying that says ‘good times create weak men, weak men create hard times, hard times create strong men, and it is strong men who create good times.’ This year, we Argentines have proven to be strong men and women, forged in the heat of difficult times,” Milei said.
“We have shown that, when a people touches the bottom of the abyss, its urgency to undertake a deep and irreversible change becomes a true force of nature,” he continued.
Milei stressed that his administration will continue with his economic reforms throughout 2025 and to that end, he stated that his administration is currently finalizing a “structural tax reform” that will reduce the amount of national taxes by 90 percent while restoring tax autonomy to Argentina’s provinces.
“Thus, next year we will see a real tax competition among the Argentine provinces to see who will attract the most investment,” Milei said.
The Argentine president ensured that his administration will also eliminate existing currency control measures inherited by his government next year and stated that there would be a “free competition of currencies” which, Milei explained, will allow “all Argentines will be able to use the currency they want in their daily transactions.”
“This means that from now on every Argentinean will be able to buy, sell and invoice in dollars or the currency they consider, except for the payment of taxes, which for now will continue to be in pesos,” Milei said.
The Argentine president posited that it is also essential to “break the foreign trade chains that are currently suffocating us” to accelerate the country’s economic recovery. Argentina is a member of the regional Mercosur trade bloc, a group that Milei has fiercely criticized in the past and which he now holds its pro-tempore presidency as of last week.
Milei proposed the elimination of tariff barriers among Mercosur members and added that one of his administration’s goals in Mercosur is to “increase the autonomy of the members of the organization vis-à-vis the rest of the world, so that each country can trade freely with whomever it wants as it suits them.” One of those trade deals, he said, would hopefully be a Free Trade Agreement (FTA) with the United States next year — something that, Milei said, “should have been signed 19 years ago.”
“Imagine how much we would have grown in these two decades if we had traded with the world’s leading power. All that growth was taken away from us with the simple signature of a group of bureaucrats, who refused to accept the benefits of free trade,” Milei said.
“In this way, Argentina will stop turning its back on the world and will once again be a protagonist of world trade, because there is no prosperity without trade and there is no trade without freedom,” he continued.
Milei said that his administration will continue with the deregularization and reduction of public spending throughout his second year through a “ruthless audit” that will see the elimination of unnecessary agencies, secretariats, public companies, and state institutions.
Other upcoming policies announced by Milei include proposing an “anti-mafia” law inspired by the United States’ Racketeering Influenced and Corrupt Organizations (RICO) Act to fight against organized crime, federal police reforms, the creation of an “anti-narcoterrorism” unit in cooperation with Mercosur to combat drug trafficking in the tri-border area that Argentina shares with Brazil and Paraguay, and the “imminent presentation of a plan to build new nuclear reactors and research small or modular reactor technologies,” among others.
Milei observed that 2025 will see Argentina hold midterm legislative elections and stressed that “unlike what politicians usually do, who in election years spend their time squandering the money of all Argentines” his administration would “do something different” and continue implementing his economic reforms.
“It is unique in the history of modern democracies that a government begins the election year without an expansionary fiscal and monetary policy, because that is precisely the logic of the past that has sunk us,” Milei said. “We are not going to fall into this temptation that seduced the caste, because we are the future and the prosperity.”
“We are going to continue our adjustment program to be able to lower taxes and return money to the private sector, and we are going to put on the table an agenda of profound reforms, developed on the pillars that I told you about today, so that society can legally choose which country it wants,” he continued.
The Argentine president concluded by stating that Argentina is heading towards a “future of prosperity” and said 2024 will be remembered as the “first year of the new Argentina.” Milei further stressed that, unlike other moments in the nation’s history where hope was based “on empty words, we have brought results.”
“You can see them, you can feel them. That future of prosperity is within our reach. There is nothing you can do to prevent it: you can get on the train of progress or you can be run over by it,” Milei said.
Christian K. Caruzo is a Venezuelan writer and documents life under socialism. You can follow him on Twitter here.
COMMENTS
Please let us know if you're having issues with commenting.