Argentina Imposes 'Wealth Tax' on Individuals with Assets Over 2.6 Billion Won

Tax Imposed for COVID-19 Response and Other Purposes
0.8% of Taxpayers Subject...12,000 Expected
Revenue of 300 Billion Pesos Anticipated

[Asia Economy Reporter Naju-seok] Argentina is imposing a wealth tax for the purpose of responding to the novel coronavirus infection (COVID-19). A one-time tax of about 4 trillion won will be collected from those holding assets worth more than 2.6 billion won, to be used for COVID-19 response and other purposes.

According to the Buenos Aires Times on the 6th (local time), the Argentine Senate passed a bill imposing a wealth tax on 12,000 asset holders with assets exceeding 200 million pesos (2.6 billion won) with 42 votes in favor and 26 against. Since the related law was previously passed by the Argentine House of Representatives, the tax imposition process is expected to proceed immediately. The Argentine government expects to secure about 300 billion pesos in tax revenue from this tax.

This tax, named the 'Millionaire Tax,' imposes a 3.5% tax on domestic assets and a 5.25% tax on foreign assets.

[Image source=EPA Yonhap News]

The Argentine government plans to allocate 20% of the funds collected through this wealth tax to purchase COVID-19 related medical equipment, another 20% to support small and medium-sized enterprises, 15% to social development, 20% to scholarships, and 25% to natural gas projects.

A ruling party official explained that those subject to this tax represent 0.8% of all taxpayers. The official stated, "42% hold assets denominated in US dollars, and 92% of these assets are held overseas."

The Argentine government and the ruling party emphasize that this tax is a one-time levy, implemented in response to the special circumstances of the COVID-19 pandemic. On the other hand, the opposition party argues that the wealthy should have been encouraged to donate instead. They warn that if such a tax is realized once, it could be repeated continuously thereafter.

According to the international statistics site Worldometer, Argentina has the 9th highest cumulative number of COVID-19 cases in the world at 1,463,110 as of that day. The death toll has also reached 39,770. A survey conducted by Bloomberg among economic experts forecasts that Argentina's gross domestic product (GDP) will shrink by 11.6% this year.

This content was produced with the assistance of AI translation services.