Argentina Plans 1-Point Tax Cut, Big Reform Later
ARGENTINA · ECONOMY
Key Facts
- —The country Argentina is South America’s second-largest economy. President Javier Milei has governed it since December 2023.
- —What happened On Friday 2 October 2026, Economy Minister Luis Caputo told Argentine business leaders that taxes should fall by another 1% of GDP next year.
- —Who is who Caputo addressed the 62nd IDEA Colloquium in Mar del Plata, an annual forum of Argentine executives, in a recorded message.
- —The numbers Taxes have already fallen by about 3% of GDP, he said. The aim is 4% by the end of Milei’s term in December 2027.
- —Why it matters in the US US holders of Argentine bonds and shares see modest tax relief ahead, but a slow start to deeper reform.
- —Still open Caputo first said “post 2031”. His ministry says he meant “after 2027”, and reports differ on how the 4% target is counted.
Argentina’s Economy Minister, Luis Caputo, has told business leaders that taxes should fall by another 1% of GDP next year. A full overhaul of the tax system, he said, comes only after 2027. For investors in Argentine bonds and US-listed Argentine shares, the message is steady tax cuts now and structural change later.
Caputo spoke on Friday 2 October 2026 at the closing session of the 62nd IDEA Colloquium in Mar del Plata. IDEA is a business association that gathers Argentine executives every year. He delivered a recorded message before travelling to Paris for Argentina Week.
What Caputo promised
Caputo said the government has already cut taxes by about 3% of GDP, “as far as fiscal balance allowed”. He expects roughly another 1% of GDP in relief next year, according to Perfil and iProfesional. Several outlets report that the target by the end of Milei’s term is 4% in total.
The bigger change is a simplification of the tax system. Caputo called the current structure “disastrous” and said it has an excessive number of taxes. He singled out taxes levied by provinces and municipalities as among the most damaging to competitiveness.
That makes the politics hard. A full reform needs agreement with the provincial governors and majorities in both chambers of Congress. Caputo said governors “are key” to making Argentina competitive.
The 2031 slip and the 2027 correction
In his recorded remarks, Caputo said: “Post 2031 va a haber una reforma tributaria de simplificación impositiva.” That is Spanish for “after 2031 there will be a tax-simplification reform”. La Nación headlined that he had pushed the reform back to after 2031.
Afterwards the Economy Ministry said he meant 2027. Economic adviser Felipe Núñez wrote on social media that Caputo “meant to say 2027”, as Perfil reported. Other outlets quoted him promising a reform “in Milei’s second term”.
Those versions fit together. Milei’s current term ends in December 2027, so a second term would begin right after the 2027 presidential election. The reform is therefore a promise for a possible re-election, not a bill for this Congress.
Why the cuts are slow
The government has tied every cut to its budget surplus. On 28 August it dropped plans for a general tax cut this year, according to Canal 26. The primary surplus, which excludes interest on public debt, was 0.9% of GDP in the first seven months of 2026. After interest, the surplus was only 0.1%.
Argentine think tank IARAF estimated the national tax burden at 23% of GDP in 2024 and 21.5% in 2025. It projected 20.6% for 2026, as El Cronista reported in July. Caputo’s 4% target would be measured against a base that is already falling.
Investment, the peso and pensions
Caputo pointed to the RIGI, Argentina’s incentive regime for large investments, as the model for the whole economy. Caputo said on 2 October that approved RIGI projects total US$56 billion, with another US$150 billion in the pipeline. Caputo said he wants the economy to “converge to the RIGI” rather than keep it as a special regime.
He rejected devaluing the peso to gain competitiveness. “Devaluation is simply miserable wages for people,” he said. He argued for lower taxes, lighter rules, better infrastructure and cheaper credit instead.
Pension reform comes last, in his sequence, because the government must first see how much money is available. On markets, Caputo said Argentina’s country risk had climbed from about 450 to above 600 basis points. Country risk is the extra yield investors demand on Argentine dollar bonds over US Treasuries. He put half of the rise on global conditions and half on fear of a return to the past.
What it means for you
If you hold Argentine dollar bonds or US-listed Argentine shares, the 2027 relief is the part to watch. It is small, but it depends on the surplus holding, which is the same condition bond investors follow. A big simplification is not a near-term catalyst.
Companies planning projects in Argentina should look at the RIGI, which is already law. It offers a stable framework without waiting for Congress. Expats and business owners in Argentina should expect the current tax system, including provincial taxes, to stay for now.
For more on the tax debate, see our reports on September tax revenue, the cut in tax fines under Inocencia Fiscal II and Caputo’s denial of a recession. More coverage is on our Argentina page.
What is not known
The Economy Ministry has not published a draft bill or a timetable. It is unclear which taxes would be merged or cut first. Caputo did not say how provinces would be compensated for giving up revenue.
Reports also differ on the 4% figure. La Nación and Infobae describe it as the total by the end of the term. Río Negro quotes Caputo as promising “another 4 points” by then. The Ministry has not clarified which version is correct.
The outlook is steady rather than dramatic. Tax relief will follow the surplus, and a full overhaul will wait for the next political cycle. The pace will depend on the budget, on the governors and on the 2027 vote.
When will Argentina’s tax reform happen?
The Economy Ministry says Luis Caputo meant “after 2027”, not “after 2031” as he first said. That would put a full simplification reform in a possible second Milei term.
How much have Argentine taxes fallen under Milei?
Caputo said taxes have fallen by about 3% of GDP. He expects roughly another 1% of GDP next year and a total of 4% by the end of Milei’s term.
Will Argentina devalue the peso?
No, according to Caputo. He rejected devaluation as a route to competitiveness and said lower taxes, lighter rules, infrastructure and cheaper credit should do that job.
What is the RIGI?
The RIGI is Argentina’s incentive regime for large investments. Caputo said on 2 October that approved projects total US$56 billion, with US$150 billion more in the pipeline.
Why does Argentina need governors for tax reform?
Provinces and municipalities levy some of the taxes Caputo calls most distortive. A full reform needs agreement with governors and majorities in both chambers of Congress.
Sources: Argentine Economy Ministry, 1 Oct 2026 · Diario Río Negro, 2 Oct 2026 · iProfesional, 2 Oct 2026 · Perfil, 3 Oct 2026 · La Nación, 2 Oct 2026 · Infobae, 2 Oct 2026 · El Cronista, 2 Oct 2026 · Canal 26, 28 Aug 2026 · El Cronista on IARAF data, 11 Jul 2026. Retrieved 5 October 2026.
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