The measure partly cushioned the sale of foreign currency for payments of services and expenses abroad, but in amounts of low incidence
By Fabian Red
02/09/2023 – 1:00 p.m.
In times of demagogy, post-truth and media operations, strong headlines have more impact than the results or consequences of what is being proclaimed. In the last quarter of 2022, a clamor for social justice called for an increase in taxes on the dollar sales for those who traveled to the World Cup in Qatar to support the National Team, in the midst of strong restrictions on access to the foreign exchange market.
First it was the industrialists who proclaimed the protection “dollars for production” (that is, they wanted them for themselves) and then other sectors joined, including social referents, who found in this speech a “new claim” to defend rights.
In early times the economic team resisted the measure under a technically understandable argument: “Add a new perception on account of the tax on Personal Property or Earnings At this time of the year (mid-October) it doesn’t make much sense because the refund already applies on December 31,” was the explanation that emerged from the 5th floor of the Palacio de Hacienda.
Finally, the temptation to ingratiate himself with a speech “punishing the rich” took hold and on October 12, the AFIP issued General Resolution 5270/2022, by which a new surcharge of 25% was added to the price of official dollar when card expenses exceed US$300.
Qatar dollar: a tax on tourism abroad
Although it was called “Qatar” Because they tried to link it to the “economic power” of those who would travel, this new tax affected and affects all citizens who, on a trip, be it for pleasure, work or health reasons, leave the country and spend with a credit card above of the US$300.
In this way the “Qatar dollar” It is made up as follows: official contribution + 30% COUNTRY tax + 45% on account of Income Tax + 25% on account of Personal Assets.
Qatar dollar: too much noise for meager results
During the first month of validity of the regulation, the Central Bank sold US$327 million to serve non-resident providers, which meant a 16% decrease compared to September when it had been US$391 million. In relation to the same month of 2021, it represented an increase of 89%.
Already in November –the month in which the World Cup began- the outflow of dollars through this channel was US$279 million, 14.6% less than the previous month. Compared to November 2021, it was 35% higher, which marks a deceleration year-on-year from 89% in October. And in December the sales of the monetary authority through this channel were US$277 million, in line with November and 38% higher than a year ago, maintaining the same level of variation.
In short, during the two and a half months that the regulation was in force, card expenses cost the central bank US$883 million. In the last quarter of 2021 it had been US$581.
Qatar dollar: the balance
Consequently, the impact from the strictly economic point of view seems to have been minimal, since of those US$883 million sold, a portion that was applied to purchases of less than US$300 (not specified by official statistics) was not reached by the additional 25% on Personal Property. And in addition, another part of the remaining amount was returned in the liquidation of the tax. Definitely, the results do not look very attractive depending on the righteous clamor that wanted to be imposed. But at the same time, with the arrival of 2023, the measure became a boomerang.
It was the same Minister of Economy, Sergio Massa, who appealed to the demand for tourism that drove the last rise in the blue dollar. The head of the Palacio de Hacienda affirmed that some 350,000 Argentines had decided to spend the summer abroad. The travel profile for “summer” vacations is different from that which can be considered on a trip to “Qatar”, Europe, the United States or other latitudes where the use of credit cards is essential due to restrictions on the movement of cash.
With a predilection for neighboring countries, tourists flocked to seek “crisp bills” for their expenses in Brazil, Uruguay, Chile or other nearby destinations and pushed the price of the parallel dollar, bringing it up to $380.
During the two and a half months that the regulation was in force, card expenses cost the Central Bank US$883 million
The consequence is that these days the price was paired with the “Qatar”but for those who cannot do the tax relief, it is still more convenient to get cash. On the other hand, the decision to recognize the price of the MEP dollar for foreigners who use credit cards in the country also reduced supply to that market, propping up the soaring. In short, a series of measures that seem to cancel themselves out and only make everyday life more complex.
