Lawmakers in Argentina’s lower house on Wednesday approved a bill that will see the nation’s wealthy citizens slapped with a one-off capital levy on assets.
The so-called "wealth tax," backed by President Alberto Fernández’s government, will see individuals with more than US$2.3 million in assets make an “Extraordinary Solidarity Contribution.” Officials are hoping the tax could rake in upwards of US$3 billion.
The details of the initiative are as follows:
• One-off contribution exclusively levied on the extremely wealthy, depending on their declared assets as of December 31.
• Only those possessing a declared fortune exceeding 200 million pesos are liable to pay two percent, rising in proportion to the size of assets (up to a maximum of 3.5 percent for fortunes exceeding 3,000 million pesos).
• Approximately 9,298 people are liable, 0.8 percent of total taxpayers who submitted tax returns and 0.02 percent of the total population, according to the government’s initial estimates. Some experts, however, have said it could be three times as high as that.
• Around half those expected to pay own 200-400 million pesos.
• The highest rate applies to less than 300 people, according to initial estimates.
• For assets abroad, the rates are 50 percent higher.
• The contribution is estimated to net approximately 300 billion pesos.
• AFIP tax agency designated as body in charge of applying the law and issuing the complementary regulations determining deadlines, forms of income, presentation of sworn statements and other aspects related to the collection of this contribution.
• According to the text of the bill, proceeds will go to:
1. Buying health equipment to tackle the pandemic (20 percent).
2. Supporting PyME small and medium-sized companies with subsidies and credits (20 percent).
3. Urbanising shantytown neighbourhoods with works employing locals (15 percent).
4. Equipping YPF with works to produce and package natural gas, via Enarsa (25 percent).
5. Financing the relaunch of the PROGRESAR plan so that the young can continue studying (20 percent).