Argentina offers new tax amnesty

Added 18th May 2016

In a bid to capture undeclared funds and assets from Argentines at home and overseas, Argentina's national government has confirmed that it will offer a new tax amnesty this year.

Argentina offers new tax amnesty

Finance minister Alfonso Prat-Gay confirmed last week that “the government will carry out a tax amnesty that will last until the end of the year, allowing those who don’t have their accounts in order to regularise their situation by January 2017”.

According to the Buenos Aires Herald, Prat-Gay attributed the upcoming tax amnesty to the fact that most countries will automatically share tax and asset information from next year.

He warned that those who don’t take advantage of the amnesty “won’t have anywhere to hide their assets” in 2017.

Details about the plan are sparse, but Prat-Gay said that those participating in the latest amnesty will be hit with very high taxes.

It is estimated that Argentines hold up to $400bn (£276.5bn, €353.3bn) in assets offshore, with the government hoping to net around $60bn through the scheme.

Liechtenstein disclosure failure

While many will view this as the ‘last chance saloon’ for Argentines hoping to avoid an increasingly inevitable jail sentence, the underperformance of the Liechtenstein Disclosure Facility (LDF) proves that there are many who won’t jump at the opportunity to regularise their affairs.

LDF was an agreement between Liechtenstein and HM Revenue & Customs that offered UK taxpayers with undeclared offshore assets the opportunity to anonymously regularise their tax affairs without facing criminal prosecution.

Launched in 2009, the offer window closed at the end of 2015, with HMRC raising about a third of what it had hoped to raise.

Bond sale

The tax amnesty is the latest move by the Argentine government to re-establish itself in the international markets.

Argentina raised around $16.5bn in a sovereign bond sale in April, having been frozen out of the global markets for more than 15 years by a group of US hedge fund managers, following its $100bn default in 2001.

However, despite the success of the oversubscribed debt offering, which attracted bids of more than $65bn, rampant inflation, job losses, and domestic strife could spell trouble for president Mauricio Macri. 

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Same old

This is the sort of thing that Argentine governments try every few months, since those government are invariably heavily in debt. And the results are the same: Argentines know that the worst thing you can do with money is trust it to the Argentine government, which has a long history of "converting" (stealing and/or devaluing) private funds. Every Argentine knows that dollars inside mattresses and hollows in walls are much safer than anything declared or placed in an Argentine bank. Argentine governments simply cannot be trusted.

Posted by: Hernan, 22 May 2016

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Kirsten Hastings

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Kirsten is a senior reporter for International Adviser, covering global news stories about the financial services industry. She joined Last Word Media in October 2015 after two years working as a reporter covering the staffing and recruitment industry. Kirsten has a Masters in Financial Journalism from the University of Stirling. 


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