Currencies

Defending reserves, Argentina lifts tax on foreign-currency card purchases

Buenos Aires, July 13 (Reuters) – The Argentine government on Wednesday raised by 10 percentage points the tax it applies to card purchases made abroad in foreign currency, as it sought to defend its already low level of reserves.

The move covers debit and credit cards and comes as the South American country also tries to tame inflation above 60% and pressure on its currency.

The tax rate has risen to 45% from the previous 35%. It also applies to travel fares for international destinations if transaction completion depends on access to the foreign exchange market regulated by the central bank, according to a resolution published by the Federal Administration of Public Revenue, an agency of the Economy Ministry.

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The agency said it had changed the rate due to the strong contributory capacity of different economic sectors, especially those that could pay certain expenses in foreign currencies.

The move came just weeks after Silvina Batakis took over as Argentina’s new economy minister, replacing Martin Guzman, who resigned abruptly this month.

Argentina has a foreign currency shortage and must meet goals agreed with the International Monetary Fund to accumulate monetary reserves. The black market peso is near double the official spot rate, shielded by currency controls.

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Reporting by Jorge Iorio, Walter Bianchi and Maximilian Heath; Writing by Valentine Hilaire

Our Standards: The Thomson Reuters Trust Principles.

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