Argentina Restricts Online Shopping By Imposing Tax Form

By: EW News Desk Team   Date: 21 January 2014

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21 January 2014

Argentines who shop online must now file a tax statement to the government before they can receive their goods, reported the Associated Press on Tuesday, in another effort by the country to restrict the spending of foreign currency.

Effective this year, the new rule requires anyone buying items through international websites to sign an online declaration and pay the required tax. To enforce this, items from overseas will no longer be delivered by post to people's home address. They must be collected at the customs office.

The move follows a law introduced last December, which requires Argentines to pay a 35 percent levy on all purchases made on their credit cards in a foreign currency. According to AP, some purchases will now be taxed by as much as 50 percent of their value.

The BBC reported that each individual would still be allowed to buy up to $25 a year from abroad tax free.

Authorities have been imposing currency controls since 2011, but foreign reserves continue to plunge. Over the last year, reserves have tumbled an average of $1.3 billion per month, falling to $29.7 billion on Monday – the lowest level since 2006.

Cabinet Chief Jorge Capitanich said that the number of Argentines using the Internet for shopping abroad has “grown extraordinarily.”

"We believe there is a drainage of foreign currency…we have to be very careful in the management of reserves to guarantee the flow of basic, intermediary and industrial materials," he said last month.

Related: Argentina Slaps 35 Percent Tax On Credit Card Purchases Overseas

Related: Brazil Raises Tax For Debit Card Purchases Abroad By 1600 Percent

Belen Olaiz, an economist at Buenos Aires-based research company Abeceb.com, however believed that while some Argentines may be spooked by the idea of providing personal information to the tax office whenever they purchase items online, the measure was still unlikely to place a serious dent on the declining reserves.

“This (the tax form) is a way of putting another obstacle in the way of people who are buying on the Internet,” Olaiz told Bloomberg. “[But] introducing a requirement to fill out a form to reduce online purchases isn’t going to resolve the problem of declining reserves.”

Referring to the 35 percent tax on credit card purchases overseas, economist Jose Luis Espert added: "This is a ridiculous step that again hurts the private sector.”

"The government is financing it by printing pesos, but Argentines don't want pesos and spend them on travel or convert them into dollars," Espert told Reuters, claiming that the root of the problem was actually the government’s fiscal deficit - the third largest this decade.

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