Argentina announces 'millionaires' tax' to pull country out of COVID-19 crisis

A one-off tax which aims to alleviate Argentina’s destitute and battle the COVID-19 crisis came into effect on January 29. The tariff named ‘Millionaire’s tax’ will now make it mandatory for all those owning assets worth 200 million pesos or more to pay a certain proportion of their income to the government. Argentina, a country of 44 million is battling a deep crisis which has forced over 40 per cent of its population below the poverty line.

What is Millionaire’s tax?

As per the Argentinian government, all residents who possess assets worth 200 million pesos ($2.3 million) or more will be bound to pay three per cent on assets declared within the country and over five per cent on assets held abroad. The law would apply to 12,000 Argentinians with the government aiming to collect over 3 billion. According to the BBC, all the proceeds would be used the Argentinian authorities to support medical services, air pandemic hit small and medium business, provide scholarships as well as provide natural gas to people off the energy grid.

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The one of its kind law was brought in by country’s left-oriented president Alberto Fernández. Last month, the bill was passed by the country’s 72 member Senate by a majority of 42 to 26. However, Centre-right opposition has blatantly spoken against the law describing it as "confiscatory."

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Argentina has been badly hit by the coronavirus, with more than 1.9 million confirmed cases of infection and more than 47,000 deaths. The pandemic has hammered its economy the most, exacerbating the unemployment rate to 11.7 per cent. In its Annual report on economic inequality, Oxfam had lauded the bill highlighting that  Argentina was showing the way towards progressive taxation of the rich as the key to an equitable recovery from the current crisis”.

In another landmark decision, Argentinian parliament, in December 2020, voted in favour of a bill that would legalize abortions up to the 14th week of pregnancy. Although passed by the Chamber of Deputies by a large margin, the bill faced a tough competition in Senate. However, backed by the ruling government, the 72 members upper house eventually passed the bill with 38 in favour, 29 against and one abstention.

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