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ARGENTINA - BUENOS AIRES. Argentina will charge a new 25% refundable duty on all purchases made in foreign currencies, a senior tax official said on Tuesday, as the government aims to protect scarce hard currency reserves amid a severe economic slump.
Faced with sky-high inflation and a slump in the local peso, Argentina's government has sought to minimize strains on dwindling U.S. dollar reserves needed to pay for costly energy imports and debt payments alongside other priority spending.
The new duty, which can be refunded next year, goes into effect on Wednesday, public revenues chief Carlos Castagneto told reporters at a news briefing.
It will be added to a separate 45% levy and a 30% tax that also seek to protect reserves, as the government looks to discourage some spending that would force the central bank to tap into its reserves.
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Annual inflation in the South American country is seen reaching 100% by the end of this year, while the tightly controlled official exchange rate hovers around 150 pesos per U.S. dollar, or half the value of the parallel black market rate of around 300 pesos per greenback.
"We want to take care of the reserves to boost production and job creation," said Castagneto.
He added that the 25% duty will apply to monthly purchases worth $300 or more, used to buy foreign tourist trips, credit card purchases for goods in foreign currencies, as well as luxury goods.
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Economy Minister Sergio Massa has sought to incentivize the flow of U.S. dollars into central bank coffers and discourage unnecessary outflows, in part to meet the terms of a $44 billion debt deal with the International Monetary Fund, since taking the job nearly three months ago.
The measure will affect only 7% of those who register consumption in dollars with credit cards, sources from the economy ministry said.
While millions of Argentines have credit cards, only 200,000 people spent more than $300 a month, according to August data from the country's tax office.
