Saturday, May 18, 2024

ECONOMY | 07-05-2024 23:57

Milei government hikes taxes on dividends going abroad

President Javier Milei extends so-called 'PAÍS tax' (Para una Argentina Inclusiva y Solidaria) to the purchase of foreign currency for sending dividends abroad.

President Javier Milei’s government has decided to extend the so-called ‘PAÍS (Para una Argentina Inclusiva y Solidaria) tax’ to the purchase of foreign currency for sending dividends abroad.

The move runs counter to the government’s liberal policies but is in tune with its fiscal needs in a recessive economic context with both production and consumption slumping.

At the same time the government has authorised currency going abroad for bond payments, which are also subject to the PAÍS tax.

According to the decree signed by Milei and Economy Minister Luis Caputo, the measure seeks to "continue deepening the incentives for national investment" while at the same time "guaranteeing a sustainable fiscal path."

President Milei announced in April that Argentina had closed the first quarter of this year with a financial surplus of over 275 billion pesos (US$309 million at the official exchange rate), which he considered "a historic feat."

To achieve that he has applied draconian austerity to pensions, paralysed public works, eliminated subsidies and frozen budgets at 2023 levels with annual inflation running at 290 percent.

The cost has been growing social conflict with street protests and Thursday’s general strike by the CGT, the second called against Milei’s austerity policies since the government took office last December.



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