The Chamber of Deputies gave preliminary approval to the Fiscal Innocence Law II promoted by Javier Milei

The Chamber of Deputies granted preliminary approval this Wednesday to the Fiscal Innocence II project promoted by the government of Javier Milei, a reform aimed at deepening the change in the relationship between the State and taxpayers and facilitating the formalization of savings that remain outside the financial system.

The initiative received 139 affirmative votes, 110 negative votes, and 2 abstentions, and will now be sent to the Senate for further legislative processing.

The project constitutes a new stage of the Fiscal Innocence scheme promoted by the Executive and expands the scope of the Simplified Income Tax Regime, with the aim of providing greater predictability and legal security to individuals who decide to incorporate their savings into the formal circuit.

What changes with Fiscal Innocence II

One of the main changes consists of eliminating the current limits to access the simplified regime. Until now, there were caps of $1 billion in annual income and $10 billion in assets: The initiative expands the universe of individuals and undivided estates residing in Argentina that will be able to join the system.

Another central point establishes that, in the event of a supposed discrepancy in the taxpayer's declarations, the burden of proving the irregularity will fall on ARCA. The modification seeks to deepen the principle of fiscal innocence and limit the situations in which the tax authority can question the declared funds.

The reform also establishes restrictions on the sources of information that the agency can use to take action against taxpayers and aims to reduce the possibility of reviewing the origin of funds corresponding to previous fiscal years.

Additionally, the deadline to enter the regime and access its benefits is extended until December 31, 2027.

Lower fines and more incentives to formalize savings

The text also includes a permanent 25% reduction in certain fines for formal infractions for SMEs, individuals, and non-profit entities.

It also provides for a 50% reduction for certain pending fines, as part of the scheme aimed at facilitating the regularization of taxpayers.

The initiative is part of Milei's government's objective to encourage the use of the so-called "mattress dollars", seeking to ensure that savings that have remained outside the financial system for years can be allocated to consumption, investment, or credit.

With the preliminary approval obtained in the Chamber of Deputies, the ruling party has managed to advance with another of the economic reforms included in its legislative agenda. The project must now pass the debate in the Senate to become law.