Argentina's Tax Amnesty Raises USD8.3bn In Revenue

by Mike Godfrey, Tax-News.com, Washington

04 September 2009

An Argentine tax amnesty scheme aimed at enticing home undeclared assets and regularizing the black economy has ended this week after bringing in ARS33bn (USD8.3 billion) in extra revenue, President Cristina Fernandez has announced.

The scheme offered individuals and companies significant tax incentives to come clean on untaxed savings wherever they were held.

Another aspect of the scheme, which seeks to regularize employment and tax workers previously in the black economy, will continue until January 28, 2010.

In revenue terms,the highest returns reportedly came from income tax, 41% of the total, followed by VAT (25%), social security contributions (14%) and other charges (20%).

More than 200,000 taxpayers are said to have taken advantage of the scheme to regularize their tax status, and 330,000 workers have so far been brought into formal employment from the black economy; many of these registered in the very last days, when it became clear the scheme would not be extended.

Following a history of economic crises and hyperinflation, many Argentineans hold their assets illegally in hard currencies abroad or away from local banks. The amnesty is thought to have made only a small dent in the estimated USD140bn held in offshore accounts by Argentineans, and compares with capital flight reported by Reuters to be around USD11.2bn in the first half of 2009.

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