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Published on : Wednesday, December 4, 2013
Putting water to Argentines’ summer holiday plans, the Government of Argentina recently increased the tax to 35% that Argentines used to pay to travel and shop abroad. The reason cited for this steep rise is the nation’s initiative to stem the slide in country’s foreign-currency reserves.
“We believe there is a drainage of foreign currency through tourism…We have to be very careful in the management of reserves to guarantee the flow of basic, intermediary and industrial materials,” Jorge Capitanich, President Cristina Kirchner’s cabinet chief, said Tuesday. This means people planning an overseas trip have to get government approval to legally purchase the foreign currency they need.
The Kirchner administration has been repeatedly trying to stop foreign currency from being pulled out of the country.
Tourism, once a contributor to reserves, now reportedly consumes billions of dollars as Argentines shop and travel abroad with their credit cards. The difference between the inflows and outflows of dollars from tourism was a $4.5 billion deficit in the first half of the year, according to government data.