Argentina Reduces Financial Transactions Tax

by Mike Godfrey, Tax-News.com, Washington

08 October 2004

Argentine Economy Minister Roberto Lavagna has announced this week two separate tax measures that will reduce the country’s financial transaction tax and provide families and small businesses with some tax relief in the month of December.

The first measure will create exemptions for Argentina’s so-called 'checking tax,' a 1% levy on all transaction conducted through checking accounts and certificates of deposit. From the government’s viewpoint, this is to help overcome a recent “plateauing" in the growth of fixed term savings accounts and discourage transactions made in Argentina’s substantial black economy.

Under the second measure announced by Lavagna at a press conference on Wednesday, an income tax instalment scheduled to be made by certain taxpayers in December is to be deferred until a yet-to-be-determined date early next year.

According to Lavagna, this will allow “families and businesses, mostly small and medium enterprises, to have in their account or their pockets ARS710 million (US$239 million) in December.”

Lavagna also recently announced a tax exemption on imports destined for re-export.

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