The Argentine government is in the process of planning a set of large-scale structural reforms, considered essential for the economic transformation of the country and in compliance with commitments made to the International Monetary Fund (IMF). These reforms cover key areas such as the tax system, the labor market, and the social security regime, with the main objective of reducing the "Argentine cost," discouraging informality, and ensuring the sustainability of the systems.
One of the most notable proposals is the flexibilization of wage negotiations, simplification of labor relations, reduction of costs for employers, evaluation of new contractual schemes instead of severance pay, and the offering of tax incentives. Although some of these measures were previously considered and rejected on sensitive points, the government is evaluating resuming the debate within the framework of the May Pact.
The tax and labor reforms are expected to be presented before the end of the current year, aiming to restructure the current scheme to achieve greater alignment between contributions made and benefits received. The social security reform, given its complexity and social sensitivity, is anticipated for a later stage, towards the end of 2026. These transformations aim to consolidate the economic course initiated and promise a growth of 6% between December 2023 and December 2024, accompanied by a reduction in fiscal deficit.
Experts highlight the need for a coordinated reform among different levels of government to avoid compensation in taxes among them. In this sense, it is considered essential to work with the provinces on the elimination of distorting taxes such as Gross Income and municipal rates.
Regarding labor reform, greater flexibility is sought in various aspects of the labor relationship, including hours, tasks, and contractual modalities, as well as in wage negotiations. It is proposed that this reform must be articulated with tax changes to reduce barriers between formal and informal employment.
On the other hand, the social security reform aims to improve the equity and sustainability of the system through an adjustment in retirement age and the concentration of revenue collection in six main taxes. It is estimated that these structural reforms have the potential to generate a significant increase in GDP in the medium term, according to the IMF.
The government is advancing in the preparation of these projects, which seek to substantially modify the economic and social fabric of the country, ultimately depending on the political and social consensus they can generate, and on the gradual and solid support recommended by the International Monetary Fund.
