June 06, 2004 | By Keith Martin in Washington, DC

ARGENTINA is considering refunding value added taxes paid on capital equipment and construction work at infrastructure projects during the next three years.

The government proposed the measure in late April. It must still pass Congress. The program is aimed at spurring new investment. The value added tax is 21%. 

Refunds will be made within three months after taxes are paid. A total of 700 million pesos in refunds will be made on capital investments in areas other than infrastructure; there is no limit on refunds for infrastructure projects, according to Maximiliano Batista, a lawyer with Perez Alati, Grondona, Benites, Arntsen &
Martinez de Hoz in Buenos Aires.

The economy minister said that the government will give top priority to investments in the energy sector. Argentina is coping with sudden shortages of electricity and gas. Refunds will not be available on projects that were already underway when the new program was announced on April 9 or that are required under existing contracts with the government, Batista said. 

The economy minister also announced plans to allow investments in infrastructure projects to be depreciated more rapidly for tax purposes.