The Upper House approved the new tax regime, driven by Milei's Government, and expanded access to the simplified Income system, with changes in controls and benefits for taxpayers
In the realm of normative specifications, the law introduces fundamental pillars to safeguard legal security and simplify the tax burden:
Simplified Income Tax Regime (RSG): Modifies the entry conditions to the Simplified Income Tax Regime (RSG), a system from which those with income exceeding one billion pesos or a net worth greater than ten billion pesos in any of the last three years were excluded.
The National Senate turned the Innocence Fiscal II project into law, consolidating a resounding political and parliamentary victory driven by the management of President Javier Milei. After several weeks of debate in the Upper House, the ruling party managed to prevail with a solid majority of 44 affirmative votes, counting on the firm support of the bloc led by Patricia Bullrich along with the spaces of PRO, UCR, Convicción Federal, Despierta Chubut, Frente Cívico por Santiago, Independencia, La Neuquinidad, Movimiento por Misiones, Primero los Salteños, and Provincias Unidas.
This historic sanction replaces the first version of the norm just eight months after its initial approval. In the face of the advancement of fiscal freedom reforms, the opposition from the Peronist bloc aligned against it with 23 senators who rejected the initiative by linking it to a money laundering scheme.
During the session, the president of that opposition bloc, José Mayans, justified his position stating: “Our bloc will vote against because this law is connected to the economic program that affects workers, retirees, and pensioners”.
The parliamentary treatment highlighted the firm conviction of the ruling party to leave behind the presumption of fiscal guilt. In his capacity as an informing member, libertarian senator Bruno Olivera summarized the spirit of trust and respect for the private sector by stating: “This project is about trust. It’s about whether we will continue to see taxpayers as lifelong suspects or as what they really are: citizens who work, pay taxes, and deserve respect”.
During the discussion in the chamber, various opposition legislators expressed their observations. Peronist senator Jorge Capitanich questioned the work in committees stating that “there has been no presence of the Minister of Economy, of officials or representatives from the Ministry of Economy or ARCA. Specialists who have absolutely nothing to do with the initiative have simply been invited”.
Likewise, senator Adán Bahl referred to the shareable mass stating: “With VAT or with Income Tax, we are not only talking about what ARCA collects, but also, unfortunately, about how much our provinces lose”.
For his part, senator Fernando Salino suggested modifications to the official text expressing: “I propose that the restriction be for politically exposed persons, that they must respond to ARCA for the increase in wealth, and that not only officials do this, but also their spouses, partners, ascendants, and descendants in the first and second degree”.
Despite the opposition's attempts to force changes during the vote, the ruling majority maintained the closed agreements, dismissed modifications in the chamber, and approved the text in its entirety, both in general and in particular.
Significant Discrepancy: Redefines the criteria for determining when there is a relevant divergence between what the citizen declared and the records of ARCA. According to specialist Domínguez, detected differences of 15% or more, but not exceeding five million pesos, will no longer be considered a significant discrepancy. This eliminates the distortion of the previous scheme —strictly set at 15%— which exposed taxpayers to inspections for smaller amounts.
Fiscal Cap and Deadline: Establishes December 31, 2027 —the last day of Javier Milei's presidential term— as the deadline to access the benefits of presumption of accuracy and fiscal cap. Domínguez explained that this time window encourages the largest number of taxpayers to regularize their assets within the current administration's period.
On the same day, the National Senate ratified the agreements between the Nation and the City of Buenos Aires for the transfer of juvenile justice and criminal competencies, approved with 44 votes in favor and 21 against (belonging to the Justicialist bloc and Santiago senators).
The libertarian senator from Salta, Gonzalo Coraita, highlighted the institutional order that the measure generates, stating: “The approval of this agreement will allow the functions that are currently split between the Nation and CABA, which refer to prevention, social assistance, and sanctioning illicit acts, to be under the same institutional roof of a single jurisdiction”.
The norm transfers criminal and correctional justice for minors to the City of Buenos Aires, which will assume the investigation and prosecution of non-federal crimes committed by adolescents aged 14 years and up to the day they turn 18. The jurisdiction extends to adults charged together with minors to ensure the unity of judgment, while for minors under 14 years, judicial protection interventions are contemplated.
Regarding the transfer with its corresponding resources, senator Jorge Capitanich presented the provinces' view stating that “we cannot continue deepening asymmetries in terms of fiscal federalism because the City of Buenos Aires is not a province, because it is the richest district in the country and has fiscal and financial autonomy”.
