Argentina’s President Javier Milei has opted to remove proposed cryptocurrency taxes from a controversial omnibus reform package. It’s a strategic move to expedite the approval of the sweeping set of reforms and avoid long debates on matters he deems less critical.
The “Ley Ómnibus” bill—formally known as the “Law of Bases and Starting Points for the Freedom of Argentines”—initially included provisions requiring taxpayers to declare ownership of previously undeclared assets, including cryptocurrencies. However, in removing those clauses, Minister of Interior Guillermo Francos said there is a greater need for rapid economic development and legislative efficiency.
“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.
With the legislative pivot, the implications for cryptocurrency holders in Argentina remain a topic of concern and confusion. Holding crypto or paying with it is not and won’t be taxed, apparently, but selling big amounts at profit is.
“In the case of an individual, merely purchasing what the law refers to as ‘digital currency’ does not incur a tax,” Marcos Zocaro, an accountant with knowledge of the matter, told Argentinian news outlet iProUP. “Income Tax applies to the profit made from the sale, and there’s also a threshold below which no tax is due.”
For crypto investors, this legislative shift brings more nuance. On one hand, the government’s decision alleviates immediate concerns about the potential increase in tax obligations associated with the Ley Ómnibus. On the other hand, it underscores the evolving and sometimes precarious nature of cryptocurrency regulation and taxation.
Milei’s political chess
The omission of the crypto tax from the omnibus bill speaks to a broader strategy by the Milei administration: taking a few steps back following major public pushback, a set of national strikes and protests, and major criticism over the initial proposals.
The goal of the Ley Ómnibus is primarily to introduce comprehensive economic, social, and administrative reforms, which Milei says can foster economic development and freedom.
The bill has generated significant discourse due to its extensive scope and the radical reforms it proposes across different sectors, however, including defense, capital amnesty, tax moratoriums, personal asset taxation, public works, pension systems, labor formalization, privatization of state-owned companies, export taxation, the energy sector, mental health, education, environmental laws, the reconfiguration of the country’s administration, and even new divorce procedures.
Critics argue that the bill’s extensive scope and radical changes could potentially compromise the democratic framework that Argentina has cultivated over the past four decades.
One of the primary concerns revolves around the bill’s approach to human rights and democratic institutions. Critics argue that the bill seeks to dismantle essential procedures and implement regressive measures, affecting basics such as access to food, housing, and healthcare. The bill’s deregulatory nature is also seen as a potential threat, as it could lead to the privatization of essential public services without adequate safeguards to ensure quality and affordability once these services are in private hands.
Another significant point of contention is the bill’s stance on law enforcement and public demonstrations. The bill’s punitive stance on social protests reframes social protest as a crime against public order—and potentially subjects a wide range of meetings and gatherings to new restrictions and offenses. Critics say this reveals Milei’s authoritarian motives.
Milei’s party holds a minority in Congress, which means that his bill is likely to face resistance—and explains why the executive is trying to give concessions on some areas. The Congress has until February 15 to decide the controversial bill’s fate.
Edited by Ryan Ozawa.