Argentina will apply a new customs duty of 25% on purchases in foreign currencies

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BUENOS AIRES, October 11 (Reuters)Argentina will impose a new 25% refundable tax on all purchases made in foreign currencies, a senior tax official said on Tuesday, as the government aims to protect scarce hard currency reserves amid a severe economic downturn.

Faced with skyrocketing inflation and the deteriorating value of the local peso, the Argentine government has sought to minimize tensions over dwindling US dollar reserves needed to pay for costly energy imports and debt payments in addition to other priority spending.

The new tax, which can be repaid next year, will go into effect on Wednesday, state revenue chief Carlos Castagneto told reporters at a press briefing.

It will be added to a separate 45% levy and 30% tax which are all aimed at protecting reserves, as the government also seeks to discourage certain spending that would force the central bank to dip into its reserves.

The annual inflation in the South American country is observed reach 100% by the end of this year, when the tightly controlled official exchange rate hovers around 150 pesos to the US dollar, half the value of the parallel black market rate of around 300 pesos to the greenback.

“We want to take care of the reserves to revive production and job creation,” Castagneto said.

He added that the 25% duty will apply to monthly purchases worth $300 or more used to purchase tourist trips abroad, credit card purchases for foreign currency goods, as well as to luxury goods.

Economy Minister Sergio Massa has sought to encourage the flow of US dollars into central bank coffers and discourage unnecessary outflows, in part to meet the terms of a $44 billion debt deal with the International Monetary Fund since he took office nearly three months ago.

(Reporting by Belen Liotti and Eliana Raszewski; Editing by David Alire Garcia and Sandra Maler)


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