The government announced today a hike in the fee charged on debit and credit card purchases made by Argentines abroad in a bid to reduce to outflow of dollars from the country.
Resolution 3550 of the Federal Administration of Public Revenue (AFIP) was made public on the Official Gazette today and confirms the increase from 20% to 35% on all card purchases made abroad for “tourism and travelling purposes.” This also applies to flight purchases and tourism packages.
Additionally, dollars to be used for travel bought directly through AFIP will also now carry a 35% surcharge, making the so-called “tourist dollar” – the official exchange rate plus the fee – worth $8.31 today.
According to the resolution, the 35% fee is technically a tax advance, and will still be deductible from income and personal items taxes in an individual’s sworn tax statement.
The chief of cabinet Jorge Capitanich today stated the increase was necessary to safeguard the economy. “We believe that there is a drain of foreign currency via tourism operations,” he said in a press conference this morning. “We must be very careful in the administration of reserves.”
The Central Bank’s dollar reserves have fallen by around 30% this past year, causing concerns about economic stability. Capitanich added: “the volume of reserves in Argentina has been affected, in large part, by the payment of debt [this year], so conditions should normalise soon.”
In an attempt to reduce capital flight and hold on to international reserves, the government first imposed controls on foreign exchange at the end of 2011, ruling that all currency purchases must be pre-approved by AFIP. Increasingly strict controls have been added since then, with locals no longer able to purchase dollars for savings and a ‘tax advance’ surcharge added to purchases made abroad.
This has created an underground market for the exchange of dollars on what is known as the ‘blue’ dollar rate. The gap between the two rates is currently around 50%, though has reached over 80%.
On Twitter today, Argentines largely expressed their concern over the higher fees on foreign credit card purchases, particularly as a hike in the surcharge was ruled out by AFIP director Richard Echegaray just a few months ago, and because the new measure comes right before the start of the Christmas and summer holidays.