The Argentine government adopted new legislation limiting online buying on Tuesday in an effort to defend domestic production.
The resolution, adopted by Argentina’s tax agency, the Administración Federal de Ingresos Públicos , and published in the Boletín Oficial, restricts Argentines to two tax-free purchases of up to $25 on foreign-based websites per year, with a 50 percent tax imposed on any additional amount spent.
Argentines will also no longer be able to have items purchased on foreign websites delivered directly to their residences, but will have to pick up their packages at a customs office. The new resolution changes the way the government gathers information on shipments, requiring the buyer to fill out paper work on their transaction before picking up their order. Prior to the resolution, increased online spending made it difficult for Argentine Customs to track online transactions, but with the newly imposed measures, the government expects easier application of the import tax.
While international online purchasing will have tax restrictions, national online spending will still be unlimited. With Argentine reserves at $30 billion—their lowest levels since 2006—and a 30 percent drop since last year, the resolution aims at decreasing dollars from leaving the country, which can occur when purchasing from foreign countries. According to Cabinet Chief Jorge Capitanich, Internet purchases in Argentina have doubled over the past year, and Argentines spent almost 30 million dollars during an organized Cyber Monday sale last month.Capitanich defended the resolution, saying that 65 percent of Argentines’ Internet transactions are made on website based in China. “If we want to defend domestic production, we need to be able to defend what’s ours,” he said.
On the other hand, Argentine economist Belen Olaiz said that decreasing online purchasing “isn’t going to resolve the problem of declining reserves.”
The new resolution is not the first of its kind passed by the Fernández de Kirchner administration, which imposed a 35 percent tax on credit card usage abroad in 2011, as well as currency controls designed to revamp the slumping economy.