Tuesday, July 14, 2020
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ECONOMY | 16-12-2019 15:21

Fernández administration to send recovery package to Congress

Legislative package includes, among other measures, a 30 percent surcharge on 'tourist dollar,' increased taxes on exports and plans to make healthcare more accessible and affordable, according to government.

President Alberto Fernández's new government will send a recovery package to Congress to fight the country's severe economic downturn. Proposed measures include a 30 percent tax on purchases made in dollars, social benefits and financial relief to small- and medium-sized businesses. 

The government proposes to jumpstart production and is contemplating a declaration a state of economic, social and health emergency, which would allow it to reallocate budget funds to new areas. 

The economy will close the year with a 3.1 percent contraction, inflation somewhere around 55 percent, poverty at almost 40 percent (according to data from UCA), unemployment at 10.4 percent, and the peso's value slashed on last year.

"It follows a logic of distribution and solidarity," said Cabinet Chief Santiago Cafiero Sunday to Radio 10 as part of an explanation of the ideas. He said that the new taxes "hopes to preserve dollars in the Argentine economy and reactive local tourism." 

Fernández's government hopes to obtain legislative support for the surcharge on foreign expenditures as a way to restore reserves. 

Currently, international reserves are at US$43.7 million, according to the Central Bank. 

The proposed legislation also includes deferrals and tax breaks for struggling small businesses. 

"We ask that you don't fire people and that, in turn, we give you advantages so that you can grow. This includes delays for debt and tax breaks so help get you on your feet," said President Fernández Sunday on Radio Mitre. 

In an effort to curb unemployment, the President issued a decree that requires employers to pay double severance if they fire someone without justification. The decree will last six months. 

"Our legislative packet favours small- and medium-sized businesses," he said. 

As it relates to social order, the series of laws will impose a state of health emergency that will include an extension of plans for vaccination and better prescription medicine coverage, among other things. 

It also requires companies that accept payments in cash to pay an additional fee, in order to encourage electronic operations. 

For the most impoverished sectors, it institutes tax breaks. On the other hand, it puts higher charges on healthier sectors through a readjustment progressive taxes.  

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