Week in Insights: Argentina’s Lithium Tax Gamble Is a Risky Move

Curated by Daniel Xu

Argentina has voted to eliminate its federal income tax for most taxpayers. Central to this decision is a burgeoning lithium industry and a plan to tax it. The country currently is the fastest-growing lithium producer and fourth-largest in the world.

Lithium is required for batteries in mobile phones, laptops, portable electronic devices, and electric vehicles. If Argentina can continue to increase production, it may be able to peg its revenue on a well-tailored lithium tax, at least in the short term.

Such a domestic production gamble has downsides. Worldwide lithium mining stood at 28,000 metric ...