Bye COUNTRY Tax: the Government announced changes, what will happen to the dollar card?

The Government decided eliminate the obligation to advance 95% of the PAIS Tax to access foreign currency for the import of goods and services. This measure, announced by the former Federal Public Revenue Administration (AFIP), now called ARCA (Customs Collection and Control Agency), seeks to alleviate the costs of importers and reduce the implicit exchange rate associated with foreign trade. ¿But are there changes in the dollar card?

This tax relief for imports does not include consumption with dollar card: consumption with dollar credit card (dollar card) They remain taxed with 30% of the PAIS Tax.

Therefore, the reduction to 7.5% and the elimination of the 95% advance The advance payment announced today does not affect dollar card operations or the purchase of dollars for savings; It only applies to foreign trade and imports of goods and services.

What will happen to the tourist dollar?

It is not yet known what will happen to the so-called tourist dollar, which is currently around $1,640 and as of January, without the COUNTRY Tax, it would drop to $1,300.

This means that, for example, starting in January, without the COUNTRY Tax, it will continue to be more convenient—just like now— pay purchases in foreign currency directly with dollars purchased at $1,100 in the MEP or in a cave (blue dollar) than using a credit card, because in the latter case you would pay a dollar more, $1,300.

By eliminating the PAIS Tax, the so-called “tourist dollar” will be cheaper. This could increase the expenses of Argentines abroad and generate a greater deficit in the exchange account (the balance of dollars that enters and leaves the country).

What changed for importers with the new measure?

Starting today, it is no longer necessary to pay 95% of the PAIS Tax in advance to import goods or services, but the Government eliminated this requirement because the tax is about to disappear at the end of next month.

This has two implications:

1. Imports will be cheaper because importers will not have to pay the tax in advance.

2. The exchange rate for imports will be lower, causing the price in pesos of imported goods to be reduced.

In Argentina, imports are paid within 30 days because the Central Bank controls access to the exchange market. Since the PAIS Tax is eliminated before those payments are due, it would be illogical to require it now. The PAIS Tax was in effect for five years and will disappear soon. Its elimination is part of an attempt by the new government to improve economic conditions.