Argentina´s President Javier Milei, alongside provincial governors, signed the May Pact, an agreement aimed at re-establishing Argentina’s foundational principles and steering the country towards a prosperous future. The signing ceremony was attended by former Presidents Mauricio Macri and Adolfo Rodríguez Saá, as well as numerous legislators and sectoral representatives.
THE MAY PACT
The May Pact is a significant yet more of symbolic declaration, reflecting a collective resolve to break away from past divisions and restore the social contract that underpins the Argentine nation. The Pact outlines ten crucial clauses intended to rebuild Argentina’s foundations, heavily relying on Tax and International Trade in particular, 4 out of 10 points driven by Tax, mainly:
- Non-Negotiable Fiscal Balance: Maintaining a strict fiscal balance to ensure economic stability.
- Tax Reform: Simplifying the tax system to reduce burdens, facilitate trade, and improve the lives of Argentines.
- Federal Tax Co-participation: Redefining the distribution of federal taxes to end the current exploitative system affecting the provinces.
- International Trade: Opening up to global markets to reintegrate Argentina as a key player on the world stage.
Implementing most of these proposals will be challenging. In the coming months, Milei’s primary focus will be on managing foreign exchange (FX) and monetary policy amid increasing pressures in the FX markets and difficulties in accumulating reserves. This situation will complicate the process of relaxing stringent FX controls.
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