The Argentinian government announced on Tuesday a 75 percent tax increase on overseas credit card purchases as part of an effort to slow the depletion of its international reserves, which have fallen to their lowest level since 2006.
The resolution calls for a tax increase on credit card purchases made in foreign currency from 20 percent to 35 percent. The country’s dollar reserves fell 29 percent this year to $30.9 billion, after the government used some of the funds to pay international debt and to import energy, MoneyNews reports.
“There’s been a drain of foreign currency due to tourism, and we need to be very careful in order to guarantee the inflow of semi-finished and basic goods,” Cabinet Chief Jorge Capitanich said, according to MoneyNews.
After being re-elected in October 2011, Argentine President Cristina Fernandez de Kirchner began to restrict access to foreign currency. Last year, the central bank issued a list of acceptable reasons to justify purchases abroad that did not include savings or real estate and placed limits on the cash amount individuals could purchase to travel abroad, Bloomberg reports.
One month later, credit card companies were instructed to add a 15 percent tax advance to all purchases made by clients overseas. The charge was raised 20 percent last year.