The Agencia de Recaudación y Control Aduanero (ARCA) in Argentina has issued Resolution General 5822/2026, which states that interest generated from deposits in foreign currency will be exempt from income tax withholding. This update to the existing regulatory framework aims to align with the new simplified tax regime that is set to come into effect. The primary goal of this measure is to encourage individuals to formalize their assets within the economy, thereby ensuring better identification, traceability, and verification of these funds.

By exempting interest on dollar deposits from taxation, the ARCA hopes to incentivize individuals, particularly those who have traditionally kept their savings "under the mattress," to deposit their money into formal financial institutions. This could potentially lead to an increase in the volume of deposits in financial systems and bolster the economy. Moreover, it represents a significant policy shift towards making the tax environment more favorable for savings, especially in a country where inflation rates often deter people from saving in local currency.

This decision reflects the broader economic strategies of the Argentine government, particularly as they aim to stabilize the economy and encourage growth amid various challenges. By making it more attractive for citizens to put their money into banks instead of keeping it inactive, the government is looking to enhance the financial system, reduce informal economic activities, and improve revenue flows in the tax sectors through formal contributions from financial institutions and taxpayers alike.