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Milei Government Steps Up Push for Labor Reform as Governors Press for Tax Offsets

Talks now hinge on how to compensate provinces for revenue losses from proposed corporate income tax cuts.

Overview

  • Casa Rosada’s political team met on Jan. 16, with Manuel Adorni, Economy Minister Luis Caputo, Patricia Bullrich and Diego Santilli calibrating concessions to secure Senate votes.
  • Patricia Bullrich convened a Senate consultative group of technical advisers through Jan. 26 to refine the draft, and she says she counts at least 40 votes as the government targets an 11 February session.
  • Interior Minister Diego Santilli is touring provinces including Mendoza, San Juan, Chubut and Chaco before visiting Salta, Entre Ríos and Neuquén to gather support and address demands.
  • Governors are seeking compensation for coparticipation losses tied to Article 191, which would lower corporate income tax rates (from 30% to 27% and 35% to 31.5%), while the government also dangles project reactivations such as February bidding for Route 7 and work on RN40.
  • Negotiations expose internal rifts, with Santilli, Bullrich and Martín Menem open to textual changes and fiscal relief for provinces, while Caputo and Federico Sturzenegger resist altering the reform’s fiscal impact.