Argentina’s Tax Revenue Surges 86.5% in February Amid Economic Overhaul

Argentina’s tax revenue increased by 86.5% year-on-year in February, reaching $12.701 billion, according to the Customs Collection and Control Agency (ARCA). This follows a 95.2% year-on-year rise in January, when collections totaled $14 billion.

These figures underscore the impact of President Javier Milei’s libertarian economic policies, which aim to stabilize Argentina’s finances and tackle inflation. Milei, who took office in December 2023, has implemented sweeping reforms to address Argentina’s chronic economic challenges.

His administration replaced the Federal Public Revenue Administration (AFIP) with ARCA to streamline tax collection and improve efficiency. These changes are part of broader austerity measures, including deep cuts to government spending and public sector wages.

Inflation, which stood at nearly 290% annually when Milei assumed office, has since eased significantly. The administration is also negotiating a $20 billion program with the International Monetary Fund (IMF), including $8 billion in fresh funds.

This initiative aims to bolster Central Bank reserves and repay treasury debt, critical steps for lifting currency controls and restoring Argentina’s access to international debt markets.

To support the agricultural sector, which accounts for 60% of Argentina’s exports, Milei introduced temporary tax cuts for agro-exports. Soybean export taxes were reduced from 33% to 26%, while corn and wheat taxes dropped from 12% to 9.5%.

As a result, agro-export revenues surged 45% year-on-year in February, totaling $2.18 billion. While these measures have shown results, critics warn that deep spending cuts could worsen poverty and strain industrial growth.

However, with projected economic growth of 4% for 2025 and inflation expected to fall below 30%, Milei’s policies are reshaping Argentina’s economic trajectory. For investors and policymakers, this signals a potential turning point for Latin America’s third-largest economy.

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