Argentina – Solidarity Tax Contribution
On September 25, 2020, the Budget and Finance Commission of the House of Representatives issued a declaration in favor of the creation of “Solidarity Contribution” (the “Contribution”) which will be “exceptionally” and charged only once. The “Contribution” called into life by Argentina’s ruling coalition “Frente de Todos” will capture as much as 12,000 wealthy individuals and would scale up to as much as 5.25%.
On September 25, 2020, the Budget and Finance Commission of the House of Representatives issued a declaration in favor of the creation of “Solidarity Contribution” (the “Contribution”) which will be “exceptionally” and charged only once. The “Contribution” called into life by Argentina’s ruling coalition “Frente de Todos” will capture as much as 12,000 wealthy individuals and would scale up to as much as 5.25%.
Individuals with assets over 200 million pesos (USD 2.7 million) would be affected by the “Contribution”. President Fernandez’s administration needs to boost revenue to close a growing fiscal gap caused by a plunge in tax collection due to his government’s strict lockdown. Without access to credit, Argentine authorities have relied on printing money to finance stimulus measures to fight the pandemic. The coalition counts with a 300 billion pesos in tax revenue that will be used to support small and medium-sized businesses, to buy medical equipment needed to fight Covid-19 and to execute public work in poor neighborhoods. The one-off wealth tax is also likely to be part of Argentina’s negotiations with the International Monetary Fund for a new program that will replace a failed USD 57 billion bailout given to the country in 2018.
Interested people looking for guidance may approach me for advice.
