The Argentine Senate has approved a bill that would allow the government to tax undeclared assets held in foreign countries by its citizens. This includes stocks, real estate, bonds and even cryptocurrencies. The purpose of the bill is to raise more money to pay the $45 billion debt that Argentina owes to the International Monetary Fund (IMF).
The asset tax bill was approved by the Argentine Senate
The Argentine Senate approved a new bill that would allow the government to tax assets held by citizens in foreign countries. The approved text specifies that the government will tax all types of assets not previously declared to tax authorities, including real estate, stocks, cryptocurrency, and any assets of economic value.
The policy states that the funds collected will be directly administered by the Ministry of Economy. Depending on the time period and the goods owned, if approved, Argentine citizens would have to pay up to 50% on these assets. The fund, which would be denominated in dollars, would remain in effect until Argentina pays its debt to the International Monetary Fund (IMF) of about $45 billion.
The bill must now be approved by the Chamber of Deputies, where it has less chance of being passed, according to local media.
Argentines are reacting
The reaction in the country has been mostly negative, with many people criticizing many aspects proposed in the legislation. The draft mentions cryptocurrency assets, and this worries people in the sector. Kim Grauer, director of Research, believes there are good reasons for this. According to her:
The country’s total cryptocurrency market is estimated at nearly $70 billion, well above Venezuela’s $28.3 billion and second only to Brazil in the region.
This could provide the government with the liquidity it needs to finance its IMF loan repayments. Other criticisms of the project relate to the creation of foreign banks as agents to hold this money, and how the government will use international treaties to obtain information on cryptocurrency holders.
Sebastian M. Dominguez of SDC Tax Consultants stated:
There is an extensive list of countries reporting the accounts of Argentines abroad, known as “cooperators.” These are more than 120 nations, including cryptocurrency-friendly countries such as Malta, the Seychelles, the Virgin Islands, Liechtenstein, Gibraltar and El Salvador.
To that end, the Argentine tax agency announced last month its support for a global reporting system to help tax authorities avoid cryptocurrency-related evasions globally.
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