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A New Additional Tax is Regulated Only for Millionaires in Argentina

Argentina has passed a regulation about a new tax for the richest people. The additional tax is proposed to pay medical supplies and aid in the middle of the Coronavirus pandemic. The regulation itself was passed by senators only in a process with a total of 42 voters while 26 others rejected it. Currently, the tax is namely the millionaire’s tax.

With the tax, those people with assets valued more than 200 million pesos or around USD 2.5 million must pay it. Currently, the number of millionaires that is estimated with that number of assets is around 12,000 people. 

Bad Effects of Pandemic in Argentina

Based on the latest report, Argentina has about 1.5 million cases of Coronavirus infection. Meanwhile, the number of deaths is almost 40,000 cases. It is really not a good thing. Even the country has been on the fifth rank of countries in the world that report a million cases to confirm in October. Ironically, the population of the country itself is only 45 million people, making Argentina the smallest country to surpass the number.

It makes the government must be concerned about the situation even more. After doing many attempts to press the cases, one of the solutions is improving the treatment quality of the patients. Sure, quality improvement seems to possibly happen if there are not enough budgets to cover.

It is also getting worse after the government enacts total isolations and lockdowns that cause the economic condition of the country is getting pressed. The number of unemployment as well as poverty is significantly increased. Additionally, the government’s loan is raised. Ironically, even before the pandemic, Argentina indeed has some monetary problems. The country has passed through an economic recession since 2018.

“Quareternal” in Argentina

In the country itself, currently, there is a term “Quareternal” or the eternal quarantine. Sure, this term is a joke to describe the condition of Argentineans during the pandemic. Yes, the lockdown regulation is really tight. As information, Argentina is the second country with the longest lockdown duration for more than 5 months.

But the joke turns into sadness after the lockdown done from March affects their conditions economically, socially, and psychologically. The metropolitan area of Buenos Aires is a place where 40% of the population is living in. At the same time, the area is the heart of the economy of the country. Sadly, this is also the place with the most severe cases of the virus. So, there is no other choice except to totally close the location.

There are some rules related to lockdown in Argentina. People, particularly in the metropolitan area of Argentina can only go outside to buy foods and basic needs and to access the closest public services. Sure, it means that other things outside the matters above are forbidden including recreations and entertainment.

Furthermore, public transportation services are available only for essential workers or those people with special permission. Others who drive cars without permissions will lose their driving licenses. Outdoor sports and exercises are completely stopped. Fortunately, starting in June, they are starting to allow although only in particular hours.

The age group that is prone to virus transmission in Argentina is kids. For this matter also, kids are not allowed to go outside. In some cases, it is okay for them to accompany their parents to buy basic needs. Beyond that, they must stay at home without exceptions. 

The Allocations of Fund from the New Tax

Those situations lead the government to make a new regulation related to the tax. Focusing on the rich people to pay more tax is considered the best solution as well as it is a fair thing for all. Those millionaires must pay progressive rates up to 3.5% for the wealth in Argentina and up to 5.25 % for the wealth abroad. The President of Argentina, Alberto Fernandez expects to collect up to 300 million pesos from the tax.

However, not all people agree with the new tax regulation. The opposition group worries that the tax will cause trust damages for the investors. Besides, it is possible also that the tax will no longer run in the future. It is only done once after it is regulated. 

The AFP News Agency reports that from the money collected, about 20% will be used for medical supplies, 20% is for small and medium enterprises assistance, 20% is for students’ scholarships, and the rest of 25% is for natural gas ventures. It is not known yet whether the new regulation will be successful or not. However, the government is confident enough that it will give positive effects on the Argentineans during the pandemic.

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