taxed in previous years. By comparing the red and blue series, our calculations indicate that Argentina could have collected approximately 75% more wealth tax revenue in 2015 if these assets had been reported as they should have been. In terms of the total revenue loss for the period spanning from 2002 to 2015, this amounts to USD 8.4 billion or 1.8% of GDP in 2015. Interestingly, the penalty for participating in the 2016 amnesty contributed roughly 1.8% of GDP. This suggests that Argentina, through the amnesty fee, managed to recoup the entire sum of forgone revenue from the period spanning 2002 to 2015.

Additionally, the improved compliance with the wealth tax should lead individuals who had previously concealed their assets to declare the _return_ of these assets, leading to an increase in reported capital income. According to Argentine law, individuals are required to report both their foreign and domestic income in their personal income tax returns. They are subject to taxation based on their worldwide income and may obtain a foreign tax credit for taxes paid on income from foreign sources. Consequently, we anticipate that asset disclosures can potentially raise capital income taxation.

To gauge the impact on compliance with the capital income tax, we turn to the personal income tax data. Since participants in the tax amnesty disclosed their previously undeclared assets held as of July 22, 2016, and the amnesty continued until March 2017, we would expect reported capital income to start increasing from 2016 and fully reflect the asset disclosures by 2017.

Figure 11(a) compares the number of taxpayers reporting some capital income, while Figure 11(b) compares the total reported capital income amount. The data shows no significant changes in these series before 2016, followed by a substantial increase in reported capital income starting in 2016. Specifically, the number of taxpayers reporting some capital income doubled, and the capital income tax base tripled during this period. In contrast, the other three sources of income—wages, rental income, and business income—remained relatively unchanged after 2016. These patterns align with the notion that foreign and domestic capital, which previously generated taxable income but had been left undeclared before the amnesty, is reported more accurately following the program. Importantly, these improvements in reporting persisted for at least five years later.<sup>10</sup> Given that most capital disclosures were made by individuals in the top 0.1% of the

> 10 Despite foreign rental income being subject to taxation in Argentina, Figure 11 reveals that there was no notable surge in reported foreign rental income after 2016. This can be attributed to multiple factors. Firstly, as demonstrated in Section 3.1, the disclosed foreign real estate’s absolute value is relatively small, with most disclosed foreign assets consisting of stocks, investments, and bank deposits. Secondly, given that most rental income typically originates within the country, the limited amount of foreign rental income disclosed may not be substantial enough to significantly impact the total rental income illustrated in Figure 11. Lastly, it is plausible that many foreign properties did not generate rental income; for example, they may have been unoccupied or not rented out during the relevant period.

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