Argentina will return to a “tourist dollar” policy, under which foreign transactions were assessed a surcharge over the official rate amid the nation’s dwindling international reserves, Cabinet Chief Santiago Cafiero said.
The approach was followed during the administration of ex-president Cristina Fernández de Kirchner, which ended in 2015. She returned to government this week as vice-president to Alberto Fernández following October’s election.
President Fernández called Sunday for overseas shoppers and the country's powerful agricultural producers to make an extra "effort" for the good of the country.
The new government said it will put a 20 percent tax on international purchases, including airline tickets, hotels, and payments on platforms such as Netflix. The measure is part of the economic recovery package the government will submit to Congress Monday.
“With this we seek to guard the dollars the Argentine economy has and reactivate the local tourism industry,” Cafiero told the La Nación newspaper. “It pursues a distributive logic. Sectors having the capacity to make a trip abroad will have a tribute.”
The Cabinet chief said the peso is at a fair price for Argentina's exporting model.
"The thing to understand is that we all have to make an effort," Fernandez said in an interview with the Mitre radio station.
With access to international financing practically closed, Martín Guzmán, Argentina’s new economy minister, said he’s already negotiating the US$56-billion credit line with the International Monetary Fund for a new program amid the country’s economic recession. He stated that investors understand Argentina can’t currently pay its debt.
Cafiero said the government will not take unilateral decisions while renegotiating debt payments and added that Guzmán will travel to the United States before the end of the year.
Short of cash, Argentina announced an export tax increase on Saturday as the government seeks to fund its spending plans. The proposed tax was immediately slammed by the agricultural sector.
It’s unclear when the “tourist dollar” measure will be implemented, but the government has already issued a decree asking Congress to hold “extraordinary sessions” to debate a “solidarity and economic reactivation programme” that will include several measures.
"The tax that is going to be charged on purchases abroad is 30 percent, not 20 percent. It has a solidarity and distributive logic," Cafiero said in statements to Radio 10.
He explained that the tax seeks to "take care of the dollars that the Argentine economy has and reactivate the local tourism industry."
– TIMES/AFP/BLOOMBERG
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