Argentina’s ruling coalition pushes new tax on assets, money abroad to pay IMF debt

By Bala Chambers

LONDON (AA) - Argentina's ruling lawmakers are pushing for a new tax on assets and money not declared to the Treasury and kept outside of the country to help pay the debt owed to the International Monetary Fund (IMF).

On Monday, Argentina's Frente de Todos party lawmakers proposed a bill to set up a “national fund for the cancellation of the debt with the IMF,” that, if successfully pushed through, would be formed by taxing assets and money abroad which has not been declared to the Treasury.

The proposed bill comes after the government signed a new agreement with the IMF to refinance and modify the terms of the failed $57 billion program in 2018.​​​​​​​

On March 25, the IMF's board approved the new program for around $45 billion, marking it the country's 22nd program with the multilateral credit organization.

Argentine authorities argue the proposed bill "will not represent a new tax burden for most Argentines, since it will only be up to those who have assets abroad and are evading taxes or laundering money."

Gabriela Cerruti, spokesperson for President Alberto Fernandez took to Twitter to voice support for the initiative, arguing it is "based on a strict sense of distributive justice, it will contribute to the cancellation of the debt with the IMF taken by (former President) Mauricio Macri."

Vice-President Cristina Fernandez de Kirchner called for Washington's support for the bill as she met with US Ambassador Marc Stanley.

"We talked about different topics of common interest: money laundering, human trafficking and human rights," she wrote, adding that she requested US support for the initiative concerning "the cancellation of debt with the IMF, with resources recovered abroad from money laundering and evasion."

Argentines who meet the criteria will be expected to contribute 20% of undeclared assets -- with some being paid in dollars, if the bill is passed.

The initiative would potentially affect those who have changed their tax residency to another country but continue to undertake business in Argentina.

The bill has already been met with strong push-back from several opposition lawmakers.

Should it become law, the tax rate would rise to 35% after six months while those that do not comply would potentially face prison terms.

Lawmakers said around $420 billion belonging to Argentines is kept abroad and outside the Argentina financial system with only one-sixth of the figure declared.