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In Argentina, Where Saving In Dollars Is No Longer OK

Analysis: Argentina has a new system to restrict citizens' ability to purchase dollars. Is this an attempt to stabilize the Argentinian pesos or crack down on tax evaders?

Article illustrative image Partner logo In Corrientes, what's good as gold? (Adam Jones, PhD)

BUENOS AIRES - The Argentine taxation agency, (AFIP) which controls foreign currency purchases, has erased the option from their on-line authorization system to purchase dollars for “Savings.” That means that Argentines will only be able to obtain dollars for trips abroad, to purchase real estate or other large items like agricultural machinery or medical equipment.

Last November, the Argentine government instituted a new program for purchasing dollars. So-called “automatic” methods for buying dollars, including via telephone banking, were outlawed. Under the new system, Argentines wanting to buy dollars had to go to a bank, show identification and declare what they would use the dollars for. The banker would enter the customer’s information into the AFIP website. The AFIP then cross-referenced the person’s tax information, their reason for buying the dollars and the amount they would like to buy, and then either approved or declined the operation.

Several days ago, the agency’s head announced that the option “to buy dollars for saving” would disappear. And now it has. It is the tax agency’s contribution to the government’s “cultural battle” against the widely-held idea in Argentina that one should buy dollars whenever one believes that the local currency is losing buying power because of the perceived "bogeyman" of inflation (for the government, it seems, inflation does not exist).

The web page’s renovation comes just days after the AFIP managed to block an injunction from a taxpayer who had managed to get $125,000 for a real estate deal without prior approval by the AFIP.

Some have noted that by simply deleting the option from the authorization page, without issuing a resolution prohibiting the purchase of dollars for savings, the AFIP is protected from legal challenges. But that is incorrect - legal action against this latest restriction can proceed, even without official statements forbidding the purchase of dollars simply for personal savings.

In addition to having erased the option, the AFIP has essentially blocked all operations over the past month involving the purchase of dollars, except those meant to be used for travel outside of Argentina.

Up until now, courts have allowed the AFIP to block all of the complaints that have been filed in relation to the restrictions on the purchase of dollars, but is not clear if that will continue to be the case if the number of cases increases.

A recent decision by the federal judge in Neuquén, in western Argentina, found that there were “inconsistencies” in what most applicants to purchase dollars are told. And cases where they are allowed to buy the dollars but a fiscal investigation is triggered to make sure that their taxes are in order are “arbitrary and unreasonable.”

Read the original article in Spanish

Photo - Adam Jones PhD

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