As per a recent report published by local media, Argentina’s economic policy manager under the Ministry of Economy has drafted a bill to encourage citizens to declare their cryptocurrency holdings. Sources reveal that aimed at combating money laundering; the “Externalization of Argentine Savings” draft law was introduced by the country’s Minister of Economy, Sergio Massa.
The bill would require crypto holders to produce an affidavit which is like an official sworn statement disclosing the whereabouts of their holdings to the government. In return, the bill proposes tax incentives to citizens as a source of encouragement for participating in the activity.
Reportedly, the citizens who voluntarily declare their holdings within 90 days of the law coming into effect would be required to pay a menial 2.5% tax on the capital gains of their respective holdings. Further, this tax rate would increase every 90 days until it reaches 15%, the country’s standard capital gains tax rate.
Not just that, the bill also aims to encourage citizens to disclose their holdings of other financial assets subject to capital gains. Other financial assets included fiat currency, shares, stocks, real estate, and furniture.
In addition, the proposed bill would force domestic and overseas holdings to be deposited into the list of approved banks in the country or in the foreign banks regulated by that jurisdiction’s central bank or securities commission. As per sources, the bill will be tabled and discussed in the next parliamentary session.
Argentina, in recent times, has favorably emerged as a hotspot for crypto adoption. In the 2022 Global Adoption Index from blockchain data firm Chainalysis, the country was ranked 13th.
The citizens have been lured to cryptocurrencies, given the high inflation rate prevalent in the country and the ease of crypto for cross-border transactions. As per data from Statista, the country’s inflation rate hit almost 72.4% in 2022.
In October last year, the Argentine Tax Authority (AFIP) raised alarms of discrepancies while comparing the data over tax returns and the crypto holdings of numerous citizens as per reports from local exchanges. Todayq News reported that 3,997 citizens received letters from the organization about these issues, allowing them to update their tax returns to reflect their crypto holdings and pay additional taxes.