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Argentina treasury minister to propose broad tax reform - La Nacion
January 3, 2017 / 1:32 PM / a year ago

Argentina treasury minister to propose broad tax reform - La Nacion

BUENOS AIRES, Jan 3 (Reuters) - Argentina’s new Treasury Minister Nicolas Dujovne said he would propose a broad tax reform focused on slashing taxes on salaries and banking in interviews with La Nacion and other local papers published on Tuesday.

Dujovne officially joined the government on Monday, a week after center-right President Mauricio Macri fired Finance Minister Alfonso Prat-Gay citing differences in management style and split his job into two ministries, treasury and finance.

Dujovne said the tax burden on salaries was “ridiculous” at around 40 percent and pushed workers into the informal sector. He estimated that 35 percent of Argentina’s economy was informal.

Dujovne’s focus would be reducing costs to make Latin America’s No. 3 economy competitive again, he said, adding he would need “a few months” to prepare a tax reform to propose to the rest of the cabinet.

While Dujovne has pledged continuity, he is viewed as more of a fiscal hawk than Prat-Gay, whose 2017 budget projection included a 4.2 percent deficit target, higher than the 3.3 percent initially promised by Macri.

Dujovne, former chief economist at Argentine bank Banco Galicia, reiterated plans to lower the deficit beyond 4.2 percent, using revenue from a tax amnesty program. He said he wanted to reinstate mid-year deficit goals and would have press conferences every two months.

“I aim to have very clear fiscal goals for this year, 2018, and 2019,” Dujovne told La Nacion.

Macri’s government has generally been praised by investors after more than a decade of leftist rule, but investment has lagged as Argentina’s economy remains mired in recession with inflation expected to have ended 2016 at around 40 percent. (Reporting by Caroline Stauffer; Editing by Chizu Nomiyama)

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