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ECONOMY | 12-10-2022 08:17

Argentina slaps new taxes on concerts, travel before World Cup

Argentina's government is applying new taxes on travel abroad ahead of the World Cup, and on concerts by artists who charge in foreign currency, as it seeks to protect its low reserves and avoid a devaluation.

Argentina's government is applying new taxes on travel abroad ahead of the World Cup, and on concerts by artists who charge in foreign currency, as it seeks to protect its low reserves and avoid a devaluation.

The measures will become official Wednesday via government decrees, according to senior government officials, who asked not to be named. They add to an existing roster of policies – from capital controls to import restrictions – that aim to protect the government’s foreign currency reserves and meet targets outlined in a US$44-billion programme with the International Monetary Fund. 

In the case of foreign travel, Argentines who spend over US$300 on their local credit cards will have to pay a new tax on their purchases, adding to two existing levies, creating an implied exchange rate of 300 pesos per dollar or double the official rate. Because of the proximity to the World Cub, local media dubbed the measure the “Qatar dollar.” 

An estimated 25,000 Argentines have purchased game tickets for the World Cup in Qatar starting in November, according to the officials, who said the new levies aim to protect the Central Bank’s thin reserves and maintain dollar access to the country’s manufacturing sector. 

The government also announced a policy aimed at concertgoers, who will have to pay an additional 30 percent tax on tickets for shows in which the artists charge in foreign currency. The measure earned the informal title of “Coldplay dollar” because the British rock band sold out 10 shows in Buenos Aires to be played later this month, more than any other city on its worldwide tour. The implied exchange rate on concerts will start on Wednesday at 195 pesos per dollar.

Here are some details: 

– The taxes will be based on the official exchange rate, which closed on Tuesday at 150 pesos per dollar

– Monthly credit card purchases that exceed US$300 will be charged 25 percent on top of the two existing taxes of 30 percent and 45 percent

by Patrick Gillespie, Bloomberg

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