Argentina’s controversial wealth tax raised close to US$2.4 billion

RIO DE JANEIRO, BRAZIL – Preliminary data showed that around 10,000 individuals with assets over US$2.1 million paid the new tax. Argentina’s government collected 74% of its estimated total from a controversial new tax on the country’s wealthiest citizens.

The government collected US$2.4 billion, according to an official statement. Preliminary data show that 10,000 people paid the new tax, equivalent to 77% of people whose wealth put them among those subject to the levy.

Initiatives to tax the wealthy have gained support across Latin America as the region struggles to recover from its worst recession in two centuries. In Argentina, some millionaires refused to pay the tax before the government’s April 16th deadline. By early April, only 2% of taxpayers subject to the tax had settled it, according to a preliminary report.

The amount is equivalent to 0.5% of GDP and will improve the government’s tax revenue figures for April, to be released next Monday afternoon, according to Buenos Aires-based consulting firm Alberdi Partners. The government expects to use the funds for pandemic-related spending, such as health policies, small business subsidies, scholarships and housing projects.

The affected people reacted negatively to the tax. About 220 taxpayers, including the family of the late soccer legend Diego Maradona and famous footballer Carlos Tevez, took legal action against the government to avoid the payments, claiming that it is both confiscatory and unconstitutional. If the courts rule against the tax, it would create a setback for the government, according to Marcos Buscaglia, Alberdi’s founder.

“It is likely that part of that [revenue] will have to be returned if courts rule against it,” Buscaglia said.

Despite the back-and-forth on the wealth tax, Argentina’s overall tax revenues have improved from a year earlier, as collections grew 72% in March from a year earlier, above annual inflation of about 40%, according to official data.

Source: La Republica