How the Government Plan could work to activate mattress dollars without money laundering or penalties

The government reoriented the candles towards a dollarization of the economy by endogenous route, with the search for savers to turn their savings in foreign exchange outside the banking system to the transactional circuit and for that it promised that it will let consumers get their dollars and do not leave their fingers marked ”without legal or tax consequences. The objective is that the economy does not stop by the chor Treasure.

From the economic team they avoided offering specific details, although they confirmed that the Ministry of Economy, mainly from Arca, works on the final aspects of a decree that more flexible controls for those who use not declared dollars with specific use for consumption.

It will not be a laundering in the traditional sense, since a window will not open to declare tickets and leave them deposited as treasurement. Rather, the objective is to attenuate the requirement of information for these cases.

By definition, there are two laws that function as control: the criminal tax and exchange law. The government could not modify any of them by decree or resolution, since, necessarily, it would have to go through Congress, and it is not the intention in this electoral year. This limits the available options.

For some experts, the Executive could “lower the rod” regarding information request in ARCA regimes, so that data crossings are less strict. In addition, in the case of the Central bank, it could instruct the treasury not to make complaints for amounts considered minimal.

According to Sebastián DomínguezCEO of SCD Tax Advisors, currently $ 1.5 million is considered simple evasion, an amount that was established in 2017 and that, adjusted by inflation, would amount to 100 million pesos.

For Domínguez, some more variants could be: the payment of taxes not defeated in dollars, that is, allow the payment of maturities in advance; Cancellation plans of more flexible tax debts in case of being paid with dollars; the exemption of check tax for dollar movements between bank accounts and even a window of “Spontaneous declaration” of ticket possession for which he would not need a law as for the case of laundering.

To Fernanda Laiúnpartner of the Laiún study, Fernández Sabella & Smudt, “the Criminal Criminal Law is not a problem (for people), it is rather for companies and control things like currency liquidation.”

In that sense, Laiún believes that something that the government could do about the “bank” part of the controls is to remove the requirement of information from the financial entities because they follow instructions from the regulation of the BCRA, but that the problem would be in the subsequent affidavit before Arca.

“Arca should tell you that there is a patrimonial increase that cannot be justified, there is VAT and profits that you did not pay. That is the part they want to solve,” said the taxpayer.

Milei asked savers to draw their dollars from the security boxes and allocate them to purchases and transactions, ensuring that the treasury will not ask for explanations about those funds.

“We want people to enter dollars, buy what they want and not leave the fingers marked so that they will be chasing them later,” said the president.

The first president also assured that the Government will accelerate the process of dollarization of the economy in an endogenous way, that is, allowing the coexistence of the US currency with the weight.

In this regard, Javier Milei explained that the next step will be to “release” the “200, 300 or 400 billion” of dollars saved to start circulating in the economy. He assured that there will be no criminal punishments, although the scope of such a measure is not yet known.

Milei stressed that the savers who decided to keep dollars in the mattresses did it due to the loss of purchasing power for the “inflation tax.” “Those who took dollars to the mattress are not criminals. They will be able to get the dollars without leaving their fingers marked,” he said.

The president explained that the endogenous dollarization process aims to accelerate economic growth. “If today it is allowed to make transactions, why do we need to move forward? Because everyone is afraid to leave the fingers marked and then go to look for them,” said Milei, adding that, therefore, they are working with Arca, the Central Bank and the Ministry of Economy in mechanisms so that the dollars enter the economic circuit.

“In mattresses we must have between 200 thousand and 400 billion dollars. That could be a huge injection that would allow an investment boom,” he said. Milei stressed that the long -term objective is to transform Argentina into one of the main world powers in 30 or 40 years, achieving two thirds of that process in the first 10 or 15 years.

The president stressed that to achieve this objective it is essential to allow an endogenous dollarization, in which Argentines decide the amount of money in circulation.

Milei stressed that the coexistence of coins will lead to the exchange rate to reach the floor of the flotation band, and that taxes will continue to be paid in pesos. In addition, he said that, with the increase in dollars in circulation and the amount of fixed weights, the government will eventually seek to close the Central Bank.

The options, thus, range from granting some type of fiscal incentive to the immobilized currencies in the special bleaching accounts to expedite the system of payments and transactions in foreign currency. A first attempt at this strategy was linked to the laundering between August and October, a period in which just over USD 20,000 million were externalized.

The increase in currency deposits in the banks extended the ability to grant credits in dollars and that goal is what the Treasury Palace is now pursued.