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December 4, 2013

Argentina increases tax on all credit, debit card purchases made abroad

Argentinean government has increased tax on all credit and debit card purchases made abroad from 20% to 35%.

By Verdict Staff

Argentinean government has increased tax on all credit and debit card purchases made abroad from 20% to 35%.

The move aims to stop the fall of central bank reserves, which fell 29% in 2013 to $30.9bn, a seven-year low.

The Government uses these reserves to pay international debt and import energy.

The increase in tax also comes before the southern hemisphere summer vacation period, as Argentines have recently increased their spending on foreign vacations and online shopping.

The tax increase also raises the implicit exchange rate on air tickets and purchases abroad to ARS8.3 ($1.34) to the dollar from ARS7.4 ($1.19).

Cabinet Chief Jorge Capitanich said there has been a drain of foreign currency due to tourism and they need to be very careful in order to guarantee the inflow of semi-finished and basic goods.

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