The Argentine government filed a bill in Congress on Thursday to reform the country’s tax crime regime. The proposed measures aim to encourage people to use their undeclared U.S. dollars to increase consumption in Argentina, an effort that the administration kickstarted two weeks ago by lowering taxes and cutting red tape.

The bill, titled the “Tax Innocence Principle”, limits the possibility for ARCA — Argentina’s tax authority — to initiate criminal complaints. According to the head of ARCA, Juan Pazo, and deputy José Luis Espert, who announced the bill in a press conference in the Casa Rosada, the bill aims to “shield” Argentines from future administrations.

According to the text in the bill, which the Herald had access to, ARCA plans to modify the threshold by which a discrepancy in a tax statement is considered evasion — from AR$1.5 million (US$1,243) to AR$100 million (US$82,880), according to the text in the bill, which the Herald had access to.

The bill also aims to reduce the statute of limitations for tax evasion from five to three years. 

“For decades, the combination of a stifling tax system, currency exchange controls, and high inflation pushed millions of Argentines into informality and tax evasion,” Espert said. Argentines have historically saved in U.S. dollars in cash, a practice colloquially referred to as having “dollars under the mattress.” According to the INDEC statistics institute, Argentines have US$271 billion outside the formal system in total.

“The State put the gun in their hand and pulled the trigger. The State is the one that has been at fault with Argentines for decades,” Espert said, adding that the administration will “abandon the persecutory regime.” “The idea of tax innocence rules,” he added.

Pazo called the previous threshold for a discrepancy in tax statements that could be considered evasion “ridiculous.” The new AR$100 limit means that “out of about 7,000 cases opened today in the tax criminal court, only approximately 200 will remain on course, which are the ones that imply a real and significant evasion,” Pazo added.

As for the statutes of limitations, he said that “whoever fails to comply and is notified, will be able to resolve it by paying what he or she owes”. 

According to Pazo, the bill will also protect citizens who use the Simplified Income Tax Regime announced two weeks ago. People who adhere to it will be able to pay their income tax based only on their income and not on their net worth variation. He thanked the 14 provinces that have already signed an agreement with the national government to adhere to the new regime and the other two that have already committed to signing next week.

“We are going to give citizens all the necessary possibilities for them to normalize their tax situation without having a criminal problem,” he added. Pazo said that no future administration will be able to prosecute citizens based on their wealth.

“No administration of any other political sign that seeks to continue with its addiction to persecution will be able to treat all Argentines as criminals again,” he added.