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ECONOMY | 17-09-2020 19:34

Offshore millionaires become target of wealth tax bill

Government plans to broaden bill imposing taxes on the rich in order to reach non-residents and their investments in Argentine companies, according to lawmaker Carlos Heller.

Argentina's government wants a one-time wealth tax to be extended to its millionaire citizens living outside the country.

The Alberto Fernández administration plans to broaden a bill imposing taxes on the rich in order to reach non-residents and their investments in Argentine companies, according to legislator Carlos Heller, who is promoting the bill. Until now the proposal only applied to citizens living in the country.

“This is to avoid unequal treatment between residents and people who changed residence,” Heller said. “This clause aims to ensure that non-residents who are holders of shares in Argentine companies are reached by the contribution.”

The ruling Frente de Todos coalition is seeking to impose a one-time tax on wealthy citizens as part of a strategy to solidify the alliance’s left-wing credentials while boosting government revenue amid a deteriorating economic crisis. The country’s economy is in its third straight year of recession, with activity expected to decline a record 12 percent this year.

The so-called “solidarity” tax would apply to approximately 12,000 Argentines who have over 200 million pesos (US$2.7 million) in assets, according to a statement by the coalition’s press office in the lower house Chamber of Deputies. The tax would scale up to as much as 5.25 percent for ultra-wealthy citizens holding their fortune in assets outside the country, it said.

The legislation comes as the new, pro-business government in neighbouring Uruguay has made it easier for foreigners to obtain tax residency. Local media have reported that a growing number of Argentines are seeking to change their tax domicile to Uruguay, where many of them already go for summer vacations.

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by Ignacio Olivera Doll & Patrick Gillespie, Bloomberg

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