The end of the Argentine Monotributo? Evidence, risks, and the reform debate over a pillar of financial inclusion

Argentina's Monotributo, a simplified tax regime introduced in 1998, has been studied as a tool for financial inclusion, labor formalization, and social protection expansion for microentrepreneurs. This short communication synthesizes the accumulated evidence on its performance and situates those findings within the active policy debate over the regime's potential elimination or structural reform, driven by International Monetary Fund (IMF) recommendations and Argentina's broader fiscal reform agenda. The literature documents consistent growth in the taxpayer base, meaningful formalization outcomes, and expanded social security coverage, alongside structural limitations including sectoral asymmetries in effective tax rates and distortions arising from delayed indexation under inflation. Recent public statements from government officials and tax specialists highlight the institutional complexity of any transition away from the regime. This communication also considers a dimension largely absent from the existing literature: the regime's incidental exposure to exchange-rate carry trade dynamics, situating this concern within the broader theoretical framework of volatility suppression and systemic fragility. This review argues that the available evidence warrants caution regarding abrupt elimination and underscores the need for a gradual, well-sequenced reform approach.