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Argentina Plans Luxury Tax To Conserve Dollars

by Mike Godfrey, Tax-News.com, New York

27 November 2013


The Argentine government plans to increase taxes on high-end cars and other imported luxury goods in an attempt to conserve the country's reserves of US dollars.

"We will send a bill to Congress to modify the tax code, with the goal of increasing taxes on luxury cars, boats and tourist planes," Cabinet Chief Jorge Capitanich said on November 22, 2013.

Capitanich did not reveal the amount by which the taxes will be increased, but he said the proposed increases are intended to discourage the consumption of luxury goods in order to make more money available for imports that will improve domestic output.

Currently, every purchase of a luxury car is subject to a tax of between 10 and 12.5 percent of the car's value.

Sales of luxury cars in Argentina have surged recently as consumers take advantage of black market peso-dollar exchange rates to buy the vehicles at a significant discount. Many Argentines, having lost confidence in the peso, are buying imported cars to hedge against inflation in the country, which is estimated by private economists to be around 25 percent.

TAGS: tax | luxury tax | inflation | Argentina

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