Argentina “suggests” banks should limit dollar extractions by credit card holders
The Argentine central bank has informally “suggested” the banking system to limit the advances (in dollars) of credit card holders overseas, reports the Buenos Aires financial press. This is seen as another tightening of the dollar clamp imposed by the administration of President Cristina Fernandez to retain much needed foreign currency.
Under the current system credit card holders can extract 20% to 25% of their income in Pesos from any automatic teller. However overseas this means extracting dollars, at the official exchange rate, which are then reimbursed at the end of the month. The difference between the official and parallel rate for the US dollar ranges between 30% and 40%.
The Central bank according to the reports has suggested to private banks to look into these foreign currency movements and “if they consider it necessary, limit extractions by Argentines overseas”.
Currently an individual with a monthly income of 5.000 Pesos can request a bank an advance of 200 to 300 US dollars if he is abroad, and this percentage applies to higher incomes with a monthly limit of 2.000 dollars.
The news follows on statements from the head of Argentina’s tax agency AFIP, Ricardo Echegaray who despite all measures limiting access to foreign currency said that “this is a free country, tax payers can vacation wherever they want”.
He went further and said that government measures restricting and taxing purchases made abroad must not be interpreted as a ‘persecutory’ tone.
“People shouldn’t be afraid, we are only after taxes”, said Echegaray who added that the policies are coherent with President Cristina Fernández administration guidelines to make people understand paying taxes is a civic responsibility.
“Argentina is a free and democratic country. We are only asking people to have a coherent behaviour in tune with their income” Echegaray said. “Tax payers can vacation wherever they want”.
The AFIP boss also denied the government was planning to place a chip on Argentine passports. “It is out of the question. We don’t have intention to adopt any policies limiting people’s rights guaranteed on the constitution”.
AFIP is seeking to have a stronger grasp on Argentine contributors by taxing them on credit and debit card and internet purchases made abroad. According to AFIP data, Argentines spent 7.4 billion Pesos (approx 1.5 billion dollars) between January and June 18th 2012 in purchases made abroad and paid with 168,000 credit cards.
Another non financial weekly from Buenos Aires published that AFIP has purchased overseas 1.000 scanners which allegedly will be used to check the contents of private coffers in the banking system. There are half a million private coffers in banks belonging to Argentines who distrustful of their government’s policies have deposited jewels, metals and other values, allegedly undeclared for tax purposes.
Although the ‘dollar detecting scanners’ would not be used systematically, they would be applied at random to check on contributors tax statements and sworn statements of what the private coffer contains.
In the same fiscal line, AFIP is looking into how to monitor (and tax) Argentine credit card holders who purchase in the country but are supported by bank accounts overseas.