Goodbye Argentina


By Global Tax Weekly

“Fog On The River Plate: Argentina Cut Off!” That’s how it must seem to tormented Argentine consumers, who are gradually being incarcerated behind an impenetrable wall of fiscal constraints which effectively prevent them from dealing with the outside world. The rules governing e-commerce importations are so strict and bureaucratic that such imports will cease, to all intents and purposes. Argentinians are used to getting around their government’s pettifogging restrictions, yet even so, this is a Draconian and illiberal measure, which the government has been driven to by its own profligate incompetence. No doubt digital imports, which cannot be taxed at all, will substitute in some respects: no-one will buy a CD from the outside world any more; instead they will download the digital version of the album direct from i-Tunes or wherever, using a tablet bought duty-free on a trip to Hong Kong. There might be some import substitution, I suppose, but that presupposes that Argentine firms have suitable products to substitute. The tragedy is that every one of these peso-supporting devices to which the government is resorting will have the effect of driving people away from the currency. It’s too late now, anyway: Argentina is heading for another default. Two in 13 years will surely be a record?





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