February 7th, 2025
1. National Government announces tax reductions for agricultural sector
The Minister of Economy of the Nation, Luis Caputo, announced a temporary reduction of withholding taxes on the main agricultural exports and the permanent elimination of withholding taxes for regional economies. Until June 30, the rate for soybean and its derivatives will be reduced from 33% to 26%; soybean derivatives (oil and flour) will be reduced from 31% to 24.5%; wheat, barley, sorghum and corn will be reduced from 12% to 9.5%; and sunflower will be reduced from 7% to 5.5%. For regional economies, such as sugar, cotton and rice, they will be definitively eliminated. Caputo explained that although the total elimination of withholdings would require a government surplus of US$8 billion, these measures seek to alleviate the tax burden on the agricultural sector, especially in the face of challenges such as drought and the fall in international prices.
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2. The national government dissolves COPREC
Through Decree 55/2025, the national government dissolved the Prior Conciliation Service in Consumer Relations (COPREC), created in 2014, considering it redundant with other mediation bodies. The measure seeks to simplify claims and is part of a debureaucratization policy. The City of Buenos Aires already has similar instances, such as Defensa del Consumidor, Mi Reclamo and Mediación Previa a Procesos Judiciales. Consumers will continue to manage their claims through virtual platforms and local offices. In addition, the National Registry of Conciliators and the Financing Fund to cover mediation costs are eliminated.
3. The government moves forward with the suspension of PASO and the clean sheet law
After a marathon session, the Chamber of Deputies gave preliminary approval to the bill suspending the PASO (Open, Simultaneous and Mandatory Primary Elections) for this year. The proposal was supported by LLA (La Libertad Avanza) and allies, PRO party, a large portion of the UCR (Radical Civic Union), Federal Meeting, Federal Innovation, For Santa Cruz, and a significant number of legislators from Democracy Forever. Thus, the text is now ready to be debated in the Senate, where the vote count will be tighter. Likewise, the ruling party managed to obtain the majority opinion for the project of the Executive Power of Ficha Limpia, which seeks to avoid that those convicted for corruption in second instance may run for elections. The call for a session has not yet been made official, but it is speculated that it will go to the floor on Wednesday of next week.
4. The government announces that it will reduce electricity and gas subsidies in installments
Last Wednesday, the Ministry of Economy announced that the reduction of electricity and gas subsidies will be gradual. The announcement, which had already been made during the month of January, foresaw a more abrupt adjustment. The official communication was that the reduction of state aid to middle and low-income users will be “divided in 11 months,” instead of applying the reduction of the subsidized percentage in only one month, as originally planned. The government considers that the fiscal results for January allow the increase to be spaced out and avoid an inflationary impact due to the shock measure, months before the legislative elections.
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5. Negotiations with the IMF continue
The International Monetary Fund (IMF) issued a statement highlighting progress in negotiations with Argentina for a new financial agreement. IMF spokeswoman Julie Kozack acknowledged the country’s progress in reducing inflation, economic stabilization and return to growth, with a decrease in poverty. Kozack emphasized the need to maintain consistent fiscal, monetary and exchange rate policies, in addition to implementing structural reforms to sustain these achievements. The Minister of Economy, Luis Caputo, clarified that the agreement with the IMF does not imply an immediate devaluation of the peso or the automatic elimination of the exchange restrictions. The Argentine government plans to lift the exchange restrictions gradually, complying with specific conditions.
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