Argentina has been verifying money laundering by presidential mandate but has not been able to solve the problem of the informal economy and mistrust
By Dolores Olveira
09/19/2022 – 12:40 p.m.
The Budget 2023 creates a new undeclared money laundering and raises the Argentine record of an exception for defaulters by presidential mandate that had already been verified in Argentina, but it is far from being the definitive solution, according to the experts.
The Government submitted to Congress for approval within the framework of the 2023 Budget two articles related to the normalization of asset holding, indicated a report by the study Edelstein, Mariscal, Torassa & Asoc.
The two new money laundering that the 2023 Budget will bring
First, the 2023 Budget extends the scope of the Construction Promotion Law, allowing funds to also be allocated for the following purposes, explained Edelstein, Mariscal, Torassa & Asoc.:
- Acquisition of a used property that is affected by declarant’s house.
- Location with exclusive destination to house room of the tenant, for a period of not less than 10 years.
The maximum amount for this new benefit is $60 million of the value of the propertyamount that will be adjusted by the CPI.
The new laundering will allow to invest in constructions for rent in house room
Second, create a new regime within the 2023 Budget, called “Argentine Investment and Production Incentive Regime“.
Through this bleaching Individuals and companies may voluntarily declare to the AFIP the possession of foreign currency in the country and abroad.
1. The declared funds must be allocated only to the transfer of foreign currency for the payment of imports for consumption, including services, “intended for production processes”.
2. The laundering period is 360 days counted from the effective date of the law.
3. Establish a special tax that will be determined on the value of the holding that is declared according to the following rates:
- Entered from the date of entry into force of the Regime and up to 90 calendar days have elapsed: 5%.
- Admitted from 90 days and until after another 90 consecutive days: 10%.
- Admitted from 180 days and until another 180 consecutive days have elapsed: 20%.
A special tax is created with different amounts according to the terms
A regime that legalizes tax non-compliance
the bCapital laundering should be an exceptional mechanism and, if it becomes a recurring issue, legalize tax evasion and generate a high incentive for non-compliance in the short termaffirmed Florencia Fernández Sabella, partner of the LFS tax study.
What is the business logic of paying taxes according to the current tax law, if after a short time I will be able to access forgiveness?, he asked himself.
This exceptional situation is not verified in Argentina, since this would be the fourth money laundering since 2008. An average of almost one money laundering per presidential mandate: 2008, 2013, 2016 and 2022, he recalled.
Beyond the unreasonable amount, this average shows that whitewashing does not solve structural problems presented by the Argentine tax system, and that the informal sector of our economy continues to be more than relevant, he considered.
On the other hand, the new laundering that is proposed extends the scope that was foreseen in the laundering of construction, but remains restrictive with respect to the origin of the capital They may be likely to be candid and their fate warned.
Thus, this bleaching also presents a situation of inequity not only with respect to compliant taxpayers, but also with other non-compliant ones that, for example, do not have their undeclared capital in cash in foreign currency, he said.
Fernández Sabella concluded that this is yet another money laundering but the conditions are not given for it to be the lastand this is the question to be debated in society, if we really intend to generate a fair and equitable tax payment system in the future.