Argentina: new tax on assets abroad proposed to pay debt with the IMF

RIO DE JANEIRO, BRAZIL – On March 28, senators of the ruling party in Argentina proposed to create a tax on assets and money abroad not declared to the Treasury to raise funds to pay the multi-million dollar debt that the South American country has just refinanced with the International Monetary Fund (IMF).

The bloc of senators of the ruling Frente de Todos presented a bill to create a “national fund for canceling the debt with the IMF”.

“It is sought that those who have assets abroad that were absconded and are not declared before the Treasury make a special emergency contribution,” explained the parliamentarians in a statement.

The initiative is positively valued by the Government of Alberto Fernández, as confirmed by the spokeswoman of the Executive, Gabriela Cerruti.

Likewise, the Vice-President of the country and head of the Senate, Cristina Fernández de Kirchner, said that this Monday, in a meeting with the US Ambassador in Buenos Aires, Marc Stanley, she requested Washington’s “collaboration” with the bill promoted by the government in the Upper House.

Last Friday, the IMF board approved a new extended facilities program by which it will lend Argentina about US$45 billion that the South American country must apply to cancel debts for a similar amount taken with that same organization in 2018, during the government of Mauricio Macri (2015-2019).

The new agreement was endorsed by a majority in the Argentine Parliament and, despite the vote against by the ruling wing, aligned with Cristina Fernández, who rejects the fiscal adjustment that the new program will imply.

TAX ON EVASION

The bill, which several opposition leaders have already rejected, targets those who have undeclared assets abroad.

If they declare them immediately to the Treasury, they will have to pay a contribution of 20% in dollars on such assets, but if they declare them after six months from the law’s entry into force, the rate will be 35%.

Those who do not comply with the payment of this contribution would run the risk of going to prison.

The initiative even reaches those who have changed their tax residence to another country when the actual place of life and business is still Argentina and even proposes the use of the figure of the “collaborator”, who facilitates the Treasury to find undeclared assets and who will be rewarded with up to 30% of what is obtained for the information provided.

In order to put this figure into effect, another bill will be submitted to modify the exceptions to banking, stock exchange, and tax secrecy.

The senators point out that there are US$417.5 billion of Argentineans abroad or outside the Argentine financial system, of which only US$69 billion have been declared to the Treasury.

With information from EFE