Argentina has raised more than 240 billion pesos with its one-off wealth tax to pay for medical supplies and relief for small businesses battered by the coronavirus epidemic, according to official data.
Almost a year after the law’s introduction, a new report by the Economy Ministry on the so-called “Solidarity Contribution’ (“Aporte Solidario y Extraordinario para ayudar a morigerar los efectos de la pandemia” in its full name) revealed that the government has netted 247.503 billion pesos (around US$2.4 billion) through to December 18 from around 10,000 tax-payers, all in wealthy income brackets.
The measure targeted the richest of Argentina's 45 million inhabitants, seeking to raise money to buy medical supplies, aid small and medium enterprises, fund social aid, and provide natural gas to people off the energy grid.
The capital levy, more commonly known as the ‘wealth tax,’ is defined as a one-off payment by those possessing assets worth over 200 million pesos as at December 18, 2020. Those qualifying face a progressive scale ranging from two percent to 3.5 percent according to the value of the fortune. For assets situated abroad, the rate increases 50 percent.
The report glosses the revenue on a monthly basis as follows: 6.568 billion pesos (March), 103.284 billion (April), 38.654 billion (May), 24.771 billion (June), 23.872 billion (July), $22.86 billion (August), 21.18 billion (September), 4.268 billion (October), 1.414 billion (November) and 632 million pesos (December).
“These revenues were fundamental when facing the extraordinary spending in response to the impact of the second wave of the pandemic and driving forward economic recovery with social inclusion. The latter factor can be observed in the different destinations where this revenue was distributed according to the law,” said the Economy Ministry in its report.
According to the ministry headed by Martín Guzmán, thanks to these non-tax revenues incorporated into the current Budget, different jurisdictions had funds to finance the policies established by law.
As to how much of the money raised by this tax was spent and towards what ends, on December 20 180.205 billion pesos had been spent, representing around 73 percent of the total raised by the contribution. Of that, 60.19 billion pesos went on gas investments; 8.125 million pesos for social housing improvements; 18.15 billion pesos for Progresar scholastic assistance; 48.15 million pesos for Repro II wage supplements and 45.59 billion pesos for the Health Ministry to purchase vaccines and bolster the health system, according to official data.
The wealth tax was introduced by government deputies Máximo Kirchner and Carlos Heller. Following passage of the law, via General Resolution N° 4942/2021 of AFIP tax bureau in March, 2021, a payment plan was cleared in order to make the contribution.
The plan consisted of an anticipatory payment of 20 percent of the consolidated debt to enter by April 28 with the remainder to be paid in five consecutive monthly instalments.
In May, via General Resolution N° 4997/2021, a second payment plan was produced with an anticipatory payment of 30 percent and a maximum of two consecutive monthly instalments to pay the remainder with adhesion to this latter plan required by September 30.
Back in May, the AFIP tax agency said that some 3,000 people had failed to pay the levy, of whom about 200 went to court to be declared non-taxable, said the AFIP.
They included several well-known business magnates and former national team star footballer Carlos Tevez, who lost his bid to avoid paying the levy in court last week.