By Mel Rodrigues
Argentina's government of President Javier Milei has suspended the freezing of bank accounts of small businesses. Economy Minister Luis Caputo announced the measure on November 3. It will last at least until May and responds to a growing outcry from shopkeepers and business owners who say the weight of tax collection is suffocating them.
What led to the decision
Account freezes, asset seizures and restrictions on selling property have increased in recent months. Data obtained through a public information request to ARCA, Argentina's federal tax authority, show these measures rose 52% this year through August compared with the same period last year, to about 135,700 cases. ARCA did not comment on the case.
The Fundación Observatorio PyME says 15% of Argentina's small and medium-sized manufacturers have faced asset seizures or account freezes over unpaid debts. In seven out of ten cases, the notice arrived within 30 days of the default. The observatory's executive director, Pablo Dragun, said complaints spread over the past year as ARCA began acting faster.
Small businesses feel the squeeze
Vanesa Camiscia, 38, runs a fruit and vegetable stall in the Mercado Abasto market in Quilmes, in Buenos Aires province. Her account was frozen after she fell behind on installments of an agreement with the tax authority. She said she had to choose between paying suppliers and keeping her taxes up to date. “Now this is humiliating. They are suffocating small businesses,” she said.
Martin Blust, of Cuerdas SRL, a family-run maker of instrument strings founded in 1952, reports a 40% drop in domestic sales since Milei took office. The company has accumulated a debt of 55 million pesos, including ARCA's lawyers' fees, and stopped production on Fridays to cut costs. On the suspension, he was direct: “It’s a great help, but the damage is already done.”
Bullrich welcomes the move but wants more
Senator Patricia Bullrich, Milei's main ally in the Senate, praised the reversal but said other measures will be needed to restart growth. On X, she wrote: “Every businessman I spoke with told me the same thing: seizures are killing companies.”
Why it matters
Milei took office in December 2023 and has made fiscal balance a central goal. The government is trying to keep the fiscal surplus it has achieved in recent months and to contain inflation, which has fallen to 33% a year from more than 200% at the start of 2024. The warning sign is that monthly inflation rose to 2.2% in October, accelerating for a second straight month.
Producers face a heavy tax burden, prohibitive interest rates, fewer subsidies and an overvalued peso. According to government data, the private sector has lost more than 32,000 companies and 265,000 formal jobs since Milei took office. Some small business owners who backed him expected lower taxes and less state interference, and some are now reconsidering their vote in next year's presidential election.
The key question is what happens when the May deadline arrives. The suspension eases cash flow for businesses under pressure, but it does not erase the debt or reduce the tax burden. The government will have to show that this reversal is the beginning of broader relief.
VDD Analysis
By suspending seizures, the government acknowledges that a state that suffocates small entrepreneurs works against its own liberal project. Listening to those who produce is the right move. But Bullrich is right: without tax cuts and lower interest rates, the pause is little more than a stopgap. It is a lesson for any country: those who create jobs need room to breathe, not a tax collector who gets paid before the customer does.
