In order to generate more money in the form of taxes to tackle the Covid-19 pandemic, a new tax on the wealthiest people of the country has been passed by Argentina. According to this new tax, money that would be gathered from the super wealthy of the country will be used to finance medical supplies and relief measures implemented by the government to tackle the pandemic.
The one-off tax on the superrich – which is being called the “millionaire’s tax”, was passed by the country’s Senators by 42 votes to 26 last week.
According to the calculations of the people, the onetime tax will be applicable on about 12,000 people who have assets worth more than 200 million pesos ($2.5m; £1.8m) in the country.
The pandemic has so far infected close to 1.5 million people in Argentine and had caused the death of almost 40,000 of them.
The Covid-19 pandemic has hit Argentina quite hard as it became the fifth country of the world that reported more than one million confirmed cases of the Covid-19 in the month of October even though the country has a total population of only about 45 million. That made Argentina the country with the lowest population to go past the one million Cvoid-19 infection mark in October.
The economy of the country was already struggling even before the pandemic with unemployment, high poverty levels and massive government debt and the lockdown measures imposed by the government to prevent the spread of the virus and infections has further increased the economic issues for the country. The country has been in a continuous recession since 2018.
Under the new taxation law, those applicable to pay the tax will have to pay a progressive rate of up to 3.5 per cent on their total wealth in Argentina and up to 5.25 per cent as taxes on their assets and properties that are outside of the country.
According to a report by AFP news agency quoting government sources, about 20 per cent of the money that would be raised from the new tax would be expended into procuring medical supplies, another 20 per cent will be used for providing relief for small and medium-sized businesses in the country, a further 20 per cent is to be used for financing scholarships for students, while a 15 per cent of the money would be expended for social development projects, and the remaining 25 per cent will be used to fund natural gas ventures.
About 300 billion pesos is expected to be raised from this new tax by the Centre-left President Alberto Fernandez’s government.
But critics of the new onetime tax have raised concerns that this would deter and discourage foreign investors form coming into the country and fear that it would not remain a onetime tax.
The new tax was reportedly described as “confiscatory” by the Centre-right party Juntos por el Cambio.
(Adapted from BBC.com)