Argentina Expected To Impose 20% Tourist Dollars Tax

They’re hiking export taxes as high as 30% and they’ve imposed a 30% female quote for musical events that feature 3 acts or more.

Now they’re talking about imposing a 20% tax on ‘tourist dollars’ including purchases from overseas companies,

The new government said it will put a 20 percent tax on international purchases, including airline tickets, hotels, and payments on platforms such as Netflix.


Plaza de Mayo in Buenos Aires

This is part of an “economic recovery package” that will somehow “reactivate the local tourism industry.” I do not think this is how it works. Some reports place the tourist dollar tax as high as 30%. International airlines have already been reducing service to Argentina. The government says they cannot repay IMF loans without economic growth that will somehow be bolstered by higher taxes and yet the IMF hasn’t ruled out playing Charlie Brown to Lucy’s football by extending additional funds as part of a $56 billion loan package.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Maybe someday Argentina will realize that other than creating the fodder for a decent musical, Peronism is a losing proposition.

  2. It is actually 30 pct
    @robbo
    It is actually a great time to visit argentina as it is dirt cheap…
    The tax is for purchases dine abroad by argentineans
    It is a mechanism the peronists use to steal money as this creates a parallel dollar that they then use to sell in black market
    It’s a circus and it will never change

  3. @Gary – So is the tax levied on hotels within Argentina for reservations made from abroad or reservations for outside the country but made from within Argentina?

  4. So they charge you extra and then a bunch of bikers rob or kill you before you get to a hotel. What a country!

  5. @christian @chris
    This is not for hotels IN argentina
    This applies ro argentina citizens paying for hotels abroad and flight tickets And any charge they do outside of argentina
    This does not apply to any foreigner inside or outside argentina

  6. As others have already noted, I think this tax is bad for Argentines, but not necessarily bad for Americans going to Argentina. Except, of course, it is certain to eventually destabilize the country, which is bad for everyone. When I read the Peronists were back in power (which seems insane), I started wondering if they might restore the nasty arrival fee for Americans. This was eliminated after Kirchner lost power. I guess we’ll see. Meanwhile, it would be nice if American high school students would learn a little more about socialism and Argentine economic history. There are valuable lessons here for our own future.

  7. @choppeddick
    As usual, your comment has nothing to do with reality
    The peronists are thieves and populists, that doesnt mean any social progressive successful model will fail
    Look at canada (where I libe and yes, I am an american citizen as well), sweden, or any other succesful country
    But then again, trying to explain this to you will be futile…

  8. @ Doug — Based on your rude response (is “chopped dick” the best you’ve got?) it seems like they don’t teach socialism too well in Canada, either. The Nordic countries are not socialist. They have generous (perhaps too generous and expensive) social welfare programs, but they have vibrant capitalist economies. They don’t even have minimum wage laws. The problem with socialism is that it ALWAYS leads to corruption, inefficiency and loss of personal freedom. It seems to have something to do with the fact that government, in a socialist economy, always ORDERS you to do things. And, humans being human, those governments are never run by angels. I certainly don’t see too many angels in Washington. And you want to give them more power, like in Argentina? You think they’ll somehow turn out better? Just brilliant. And the fact that many others also don’t realize this is the reason I worry.

  9. @chopsticks – Do some checking. Scandinavian countries are all socialist, as my family there is happy to remind me, along with their higher standard of living, higher rates of happiness, multiple weeks of annual vacation, free higher education, etc. If you check into things, communism is what you’re talking about. Well, Marxist-Lenninism if you want to get really technical, since true communism pretty much only exists in kibbutzes in Israel these days. All of the above are somewhere on the spectrum of socialism, as is the USA, where we have Medicare and Social Security to help take care of our old and sick. A command economy like the USSR had is terrible, which is why no country has replicated that since 1991. That doesn’t mean that leaving people to starve to death out of capitalistic indifference is the way to go either. As usual, the best route lies somewhere in between.

  10. @choppedwhatever
    The problem is that every single comment you have written in the last year is meant to contradict gary even if he is write, you always have the opposing opinion regardless of the subject and you are wrong this time again
    Argentina is indeed going to shits again with this government, no doubt, but the point is that they are not socialists like you mention in your original post, they are a band of thieves
    The problem with your comment and the problem with most americans is that they think well run socialist progressive nations are communism, so countries like canada, the nordics, etc etc are perceived to be “communists” by joe in oklahoma but joe doesn’t know or doesn’t care that the population in those countries are healthier, more educated and better off overall…
    Your comment proves my point

  11. I wonder if the new government will also re-institute the reciprocity visas for US Canadian visitors to Argentina

  12. Argentina is going off the cliff with all this nonsense. I mean seriously female quotas for music festivals? No wonder their economy is in trouble.

  13. @Doug the problem with many on the left is that they think these nordic countries are all some socialist utopia. Hate to break it to you but they are among the most capitalist nations on the planet. Unfortunately, just like you are trying to point out that people on the right are uninformed about what goes on in the Nordic countries you fail to mention just how little the left understands those same countries. Seriously they have been reversing their socialist positions for years in many areas because it was harming their economies. This is the problem when people have half-baked ideas and nobody bothers to look into it.

  14. The disparity between the highest and lowest income earners in Scandinavia is 1/10th that of the US. The good folks pay high tax…but then again, everyone there does! They value a stable society and a willingness to contribute to the greater good.

  15. @Bill – The Scandinavian countries are socialist and the people are proud of it. They’re happy where they are, which is why although other people want to move there, you won’t see some exodus from Denmark, for example. In Denmark, not only is there a living wage for everyone but a minimum size for your apartment depending on the number of inhabitants. They have six weeks of paid vacation per year, paid family leave for the birth of a child, cradle to grave free health care and free education. None of these benefits is going away any time soon. They are just part of what makes for a happy, well balanced society. The way they do this is through high taxes, particularly on the rich. The idea is that it’s better to have an entire society that’s middle class and happy with a only a few rich people than to have a society where there are a large number of ultra rich while the majority of the populace lives at a substantially lower standard of living than a Scandinavian country to allow the ultra rich to maintain their wealth. It’s really a matter of choice: do you want most of the money in your country to go to society as a whole or a few gazillionares?

  16. @ Christian
    The way they do this is through oil revenues and having, despite their size, one of the largest sovereign wealth funds on the planet.

  17. @Gary as some others pointed out this will only affect credit card purchases for Argentinians when paying for anything (not only travel) outside of the country and in US dollars. In the short term this will make it an attractive option for tourists since the “blue” market for US dollars and Euros will certainly go up and if you bring cash you’ll get more $ for them. Peronists called this a “travel tax” as a clever way to mask a devaluation and make it more appealing to their followers since this will “only affect the people who is making lots of money and traveling abroad”. That’s not the case since IT companies (just to use one example) will be affected since all hosting, courses, software licences, etc are paid in US dollars and therefore will be subject to the 30% tax. Also subscriptions to Netflix, Spotify, AirBnb, etc will be taxed. In the long run, this will create another crisis, more taxes and will witness history repeat itself.

  18. Without getting into the argument over the wisdom of this policy I have to say that it’s impossible to tell from this post what the actual policy is — and it’s not clear whether that’s because Gary himself did not understand it fully, or because it serves his argument better to allow people to believe the tax is something other than it is. (To be fair, the linked article itself isn’t entirely clear about what transactions will be taxed).

    In any event, contrary to the headline of the article, this will probably make Argentina more desirable to foreign tourists in the short term rather than less.

  19. So let me get this straight…an Argentine Netflix tax is a socialist horror show that should be taught to US schoolkids as an example of socialism, but the Scandinavian countries with their universal healthcare and apartment size regulations are super capitalist countries with a wee barely noticeable twinge of leftism? I guarantee you that if any US politician suggested even 1/10th of Sweden’s policies, the US right wing would brand them a commie-socialist trying to destroy the USA. Hilariously, only a couple of months ago Mitch McConnell branded the movement for Washington DC statehood as a socialist plot, so it appears that “socialism” to US righties is just a branding exercise meaning “whatever I happen to dislike at the moment.”

  20. I went to Argentina in September and loved it. Beautiful place, friendly people and very cheap w peso at around 55 to a US Dollar (at that time). I realize they are going through economic and political uncertainty so one of the reasons you can have a nice steak dinner w wine in a great restaurant for under $15 is because of the collapse in their currency. However more taxes won’t solve the problem. Eliminating corruption and putting in steps to grow their economy is what is needed. This is counterproductive unfortunately

  21. To add to the point that Gary is trying to make; the tax on purchases and expenditures made abroad with credit or debit cards by Argentinians will be applied once the proposed new law is approved. As of now the proposed tax is 30%, and has to be approved by Congress (most likely will be approved in the next weeks.) On the other hand, the visitors from abroad to Argentina paying with credit cards or cash will not be affected under the proposed law, as the then prevailing official rate of exchange rate will be used. The visitors from abroad that choose to take the risk to exchange their cash foreign currency (mostly USA Dollars and or Euros) in the blue dollar market (caution is advised to use a trusted and known person or place; never in the streets; to avoid fake currency, confiscation, prosecution, etc.) will benefit with a better exchange rate (close to the proposed 30% tax.) A final piece of information; I believe that there may be a restriction imposed by the Argentinian Central Bank, that ATMs in Argentina do not dispense foreign currency (at least I tried in different ATM at different places, using different debit cards from the USA, several weeks ago, and could not get, but messages that the operation of withdrawal of cash could not be completed.) The USA financial institutions that I consulted regarding the unsuccessful withdrawals assured me that there was no blockage from their part.
    Further, under the proposed law, purchased made by Argentinians (it is not known at this time if it applies to foreigners,) purchases at banks of foreign currency is limited to US$200.00 and will have the proposed tax of 30% added to the exchange rate.

  22. Can someone provide me with an example of a Nordic country or any country whatsoever where the workers has ownership and control over the means of production? If I visit a Nordic country and eat at a restaurant, what share of the mixer or walk-in freezer does that worker own? How much the economy do these companies, where these worker owned collectives in an employee owns part of an on oven or perhaps a laser metal cutter, make up?

    If you want to get pedantic, than the U.S. is a socialist country too.
    Look at the fire department or Medicare.

  23. Everything the US government does on both sides of the coin is “socialist”. Whether it be spending on the military-industrial complex or welfare programs. The two big parties continuously throw money into a black pit leaving us all worse off. Both sides tell us they can do something to make things better. Why do we need more of them? Wouldn’t less of these two big parties or the government, in general, be better?

    You can’t compare a culture like Denmark to the one of the United States. Whether or not you like it the United States will never be Denmark and Denmark will never be like the United States. It’s not that simple. Certainly, there is nothing a government could do to change that.

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