Lowtax Network

Back To Top

Your Lowtax Account

Country Score
-7

Country Rankings - Argentina


  • Feb 06, 2014   Argentina: adios

    "Fog On The River Plate: Argentina Cut Off!" That's how it must seem to tormented Argentine consumers, who are gradually being incarcerated behind an impenetrable wall of fiscal constraints which effectively prevent them from dealing with the outside world. The rules governing e-commerce importations are so strict and bureaucratic that such imports will cease, to all intents and purposes. Argentinians are used to getting around their government's pettifogging restrictions, yet even so, this is a Draconian and illiberal measure, which the government has been driven to by its own profligate incompetence. No doubt digital imports, which cannot be taxed at all, will substitute in some respects: no-one will buy a CD from the outside world any more; instead they will download the digital version of the album direct from i-Tunes or wherever, using a tablet bought duty-free on a trip to Hong Kong. There might be some import substitution, I suppose, but that presupposes that Argentine firms have suitable products to substitute. The tragedy is that every one of these peso-supporting devices to which the government is resorting will have the effect of driving people away from the currency. It's too late now, anyway: Argentina is heading for another default. Two in 13 years will surely be a record? Madness for madness, though, the Italians have beaten the Argentines this week by a country mile with their completely insane EUR30 cash transaction restriction, under which all businesses will be prevented from accepting any payment greater than this amount other than through an electronic transaction, i.e. debit card or credit card or similar. Well, the word "prevented" is capable of some nuance. I remember that a couple of years ago, the government banned the use of plastic bags in supermarkets: that law didn't just fall into disuse; it was completely ignored from the beginning. The same may happen this time; but if it doesn't, then I am looking forward to watching when the customer in front of me arrives at the supermarket check-out with two trolleys, each containing EUR29 worth of goods. Or it could be done slightly more elegantly by having your son push one trolley, your husband another, and yourself the third. And so on. But of course, elegant abuse aside, the main result will be to drive more trade underground, not less, achieving exactly the opposite of what was intended. Until now, the dentist to whom I paid EUR200 for a filling, being an honorable man, declared this income on his tax return. In future, he won't be allowed to do so: if he accepts the cash from me, he will be forced to hide it, unless he invests in an "officially authorized payments terminal," which being Italian is the last thing he wants to do. And the farmer who sells me six vast jars of primitivo at ten euros a jar: thinking of him and an "officially authorized payments terminal" in the same breath is just risible. No, the law will be ignored, just like all the other maniacal prescriptions coming out of Rome. Thank goodness for Italy! There's only one prescription that will work: sack 50 percent of the bureaucrats and halve taxes. There, I've said it again, and I promised I never would.
    Source: www.tax-news.com/news/Argentinian_Customs_Duties_To_Shut_Down_ECommerce____63512.html


  • Jan 23, 2014   Argentina: squirming

    One of my editorial colleagues has put the boot into Argentina's hapless Government in an article in this edition of Global Tax Weekly, but I cannot forbear to mark it down for taxing exports. The fact that the Government is forced to take such action is the measure of its inability to run a sound economy: there are innumerable reasons why "triangular" trading operations take place, and only some of them are deliberately deceptive in transfer pricing terms. The Argentines would like to flatten out international corporate structures so that supply chains are reduced to linear simplicity; but it is like trying to shrink a balloon by squeezing it. Clever trading multinationals will find a way around the rules, of course, but worse, the result will be to reduce Argentina's volume of trade as it becomes a less and less attractive place in which to do business. Every one of the Argentine Government's recent attempts to prevent its citizens from moderating the impact of its crazy policies simply has the effect of making their lives less worth living.
    Source: www.tax-news.com/news/Argentina_Imposes_Withholding_Tax_On_Exports____63335.html


  • Dec 05, 2013   Argentina: in denial

    I am trying to get my head around the announcement from Argentina that it will increase taxes on luxury goods "in order to make more money available for imports that will improve domestic output." OK, so the Government will have more money, and the people who buy expensive toys will have less money. How is that going to increase "useful" imports? It must have to do in some obscure way with the fact that the peso (at its official rate) is grossly over-valued against the dollar and inflation is far higher than the Government admits. It won't work, anyway: Argentines have had decades of practice at getting around official currency restrictions imposed by spendthrift governments, and are famously inventive at it. One good thing the Government did this week, at least, was to open negotiations with Repsol over compensation for its expropriation of YPF oil and gas assets last year, although the amount being talked about, at USD5bn, was half what Repsol said it was due at the time. The Government hopes that a settlement will attract Pemex into financing exploitation of Argentina's vast shale hydrocarbon reserves, reportedly the biggest in Latin America. I don't understand that, either, because Pemex itself is heavily under-invested, and every penny that it has is siphoned off by the cash-strapped Mexican government, which is trying to get the international oil and gas majors into bed with Pemex (in order to rob them in the darkness?). I don't get it at all; but perhaps things work differently on the other side of the equator.
    Source: www.tax-news.com/news/Argentina_Plans_Luxury_Tax_To_Conserve_Dollars____62824.html


  • Oct 10, 2013   Argentina: doesn't need QE

    Time to start crying for Argentina, sinking into a morass of economic woes under its inept leadership. An apparent annualized rise of 32 percent in VAT revenues last month reflects bouncing inflation rather than any economic surge, and is a more accurate indicator than the Government's pretend inflation statistic of 10 percent. The Government is short of money, in fact, especially foreign currency, as citizens do everything they can to put their assets anywhere other than in Argentina. Even the head of the tax authority says that the Government's foreign currency amnesty has been a failure; no-one trusts the Government's word or its credit. Meanwhile, the Government stumbles from one economic disaster to another: having brutally expropriated oil firm YPF without compensation, it can't be any surprise that no partners can be found to invest in it; and now it looks as if the Buenos Aires transport system will be nationalized as well, that is, the few parts of it that the State doesn't already own. By way of bread and circuses, 90 percent of the system's operating costs are already paid by the State, while ticket prices raise a mere 10 percent of revenues. The Government hasn't learnt from its catastrophic nationalization of Aerolineas Argentinas in 2008: feather-bedding and mismanagement resulted in a loss of a stunning one billion dollars in 2012. And wherefore all these unsuccessful nationalizations? Is there a Marxist in charge in the Pink House? No, this is Peronism, pure and simple, and if you lifted the lid on Argentine affairs, it would not be a pretty sight. Seldom can a country with such natural advantages have been cursed by such a succession of incapable, grasping, populist administrations. Don't go there! I went there, forty years ago, and thought it was wonderful; but even then there were "meatless days" in an attempt to boost beef exports, and this in a country with more cattle than people. That says it all. Now, plus ca change . . .
    Source: www.lowtax.net/asp/story/front/Argentina_Tax_Revenue_Up_25_Percent_In_Sept____62238.html


  • Mar 21, 2013   Argentina: being stroppy

    Argentina seems to be doing its best to acquire a reputation as an unreliable and even antagonistic international business partner. After expropriating YPF last year and annulling its tax treaties with Spain and Chile, the government is now seemingly making it impossible for mining company Vale to continue with a major potash extraction project. The culprit as much as anything is the weakness of the peso, which the government is maintaining at a ridiculously high rate with all the normal accompanying impediments such as exchange control and reporting of foreign credit card transactions. According to economists, inflation is running at 26% and is accelerating, yet the government is pretending it is 10.8% and in an act of purposeless desperation has slapped a two-month price freeze on supermarkets. Stay away!
    Source: www.lowtax.net/asp/story/front/Vale_May_Axe_Argentinian_Potash_Project_On_Tax_Concerns____60103.html


  • Nov 08, 2012   Argentina: rogue state in the making

    As far as I can make out, the Argentine tax authority, AFIP, can issue 'General Resolutions' under various powers it has through legislation, but these are not directly subject to the control of the legislature. I presume that there is some mechanism through which the victims of adverse General Resolutions can challenge them, but it is probably very obscure, long-winded and without question would involve myriads of extremely expensive lawyers. These thoughts are brought to mind by AFIP's summary actions last week in which it removed tax privileges from various international exporting companies because of what it called 'irregularities' or 'discrepancies'. That's to say, it would like to screw more tax out of them and this is an easy way to do it. Argentina has suffered a number of dictatorships in its history, sometimes overt and sometimes covert, and after several recent attacks on international law (repudiation of bond debts, the abrogation of tax treaties and the YPF sanctions) the regime is looking more and more like the latter type. Better not go there until things improve!
    Source: http://www.lowtax.net/asp/story/front/Argentina_Withholds_VAT_Refunds_From_Tax_Debtors____58084.html


  • Jul 12, 2012   Argentina: shoots itself in the foot - again - and again - and again

    What is the matter with Argentina? This has got nothing to do with the Falklands: if I was the British prime minister I would do a deal with Buenos Aires over the oil and gas, and give every Islander enough money to buy a small farm in Scotland, or even a large farm, if they didn't want to become Argentine. No, it's just that Argentina seems determined to do everything possible to irritate and fight with its neighbours. This week the problem being its unilateral and utterly unnecessary abrogation of its double-tax treaty with Chile. This is such a short-sighted, mean-minded, self-destructive action that it is hard to comprehend. What planet are they living on? It isn't one I recognize. Of course, we must be careful here: I have spent quite a bit of time in Argentina, a wonderful country, with wonderful people and the best meat in the world. It's the politicians that are the problem, not for the first time; it's they who have wasted and destroyed a country which was once and still could be one of the richest in the world. It's just very sad, and one should certainly cry for Argentina.
    Source: http://www.lowtax.net/asp/story/front/Argentina_Terminates_DTA_With_Chile____56236.html



 

« Back to Country Rankings