Argentina may impose a one-time 5% tax on companies that benefited by converting their foreign currency loans | Norton Rose Fulbright
The Duhalde government said it favors such a tax in March. The peso has lost 70% of its value since the Argentine government allowed it to float against the dollar on February 11. Borrowers were permitted to convert outstanding dollar loans into peso debts at par. Duhalde has said the country is “broke” and is looking for ways to raise money.
The bill introduced in Congress to implement the tax reads in part: “To fulfill the goal [of developing small enterprises], a National Fund for Productive Development is created and will be funded with . . . a mandatory contribution by enterprises, the debt of which is above US$ 3,000,000 at the time of conversion into pesos . . . . The contribution will be extraordinary, and will be of 5% of the debt amount.”
Maximiliano Batista, with the firm Perez Alati, Grondona, Arntsen & Martinez de Hoz in Buenos Aires, said the Argentine Congress is at least three to four weeks away from acting on the proposal, and that its fate will probably be decided ultimately by reaction to it from the International Monetary Fund, from whom Argentina is trying to borrow money.
President Duhalde also spoke in late February about imposing a one-time windfall tax on 2001 earnings of privatized telephone, power, water and natural gas companies, but his government has since backed away from that proposal.