Argentina gathers huge sums in cash from new tax amnesty law

Economy - Himanshu Gill - Dec 29,2016

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argentina gathers huge sums in cash from new tax amnesty law

Assets worth $90 billion have been declared in Argentina as a result of a new tax amnesty law which was passed earlier this year to bring back billions of dollars of offshore wealth and unregistered funds into the country.

Argentina has already collected $5.2 billion as fees pertaining to the registration of the previously undisclosed assets. These numbers were released by Argentina’s recently fired finance minister, Alfonso Prat-Gay, during his final press conference.

Economists have termed this as a ‘good news’ for the Argentine economy and a ‘great step forward’ for the long march that the country aspires to take against black money. The nation’s economy is in a bad state after 12 years of populist rule and this money could help overturn the country’s recession status.

Prat-Gay was appointed a year ago to clean up the mess formulated in the economy. He was formerly an economist at JPMorgan and also served as the president of Argentina's central bank. Prat-Gay was fired this week by Argentina’s President Mauricio Macri over management disagreements. This marked the second resignation in Macri‘s administration in less than a week, following the exit of the head of Aerolíneas Argentinas (Argentina’s largest airline), Isela Costantini.

Prat-Gay’s team had crafted the tax amnesty bill. Among his various achievements as the finance head, the most notable ones are – He lifted former government’s controls over the currency, ended a 15 year long battle with the US hedge funds and brought Argentina back into international bond markets for the first time since 2001.

People who are declaring their cash will need to pay a tax of 10%. The bill also includes an extension that allows citizens with foreign assets to declare their assets until the end of March 2017. However, these new revelations would be subject to a 15% tax between January and March.