‘MILLIONAIRE TAX’: Argentina passes law to tax wealthy citizens to pay for coronavirus supplies and relief measures

Argentina passed a new tax law on its wealthiest people to pay for medical supplies and relief measures amid the ongoing coronavirus pandemic.

Senators passed the one-off levy by 42 votes to 26 on Friday.

The law dubbed as “millionaire’s tax” affects some 12,000 citizens who are worth more than 200 million pesos or USD $2.5 million.

One of the law’s authors said it would only affect about 0.8% of taxpayers. Those affected will pay a progressive rate of up to 3.5% on wealth in Argentina and up to 5.25% on that outside the country.

AFP news agency reports that of the money raised, 20% will go to medical supplies, 20% to relief for small and medium-sized businesses, 20% to scholarships for students, 15% to social developments, and the remaining 25% to natural gas ventures.

Centre-left President Alberto Fernandez’s government hopes to raise 300 billion pesos.

But opposition groups fear it will discourage foreign investors, and that it will not be a one-time tax.

Argentina has recorded close to 1.5 million infections and almost 40,000 deaths from the coronavirus.

It has been hit hard by the pandemic, becoming the fifth country worldwide to report one million confirmed cases in October despite only having a population of about 45 million people – making it the smallest nation at the time to surpass that figure.

Lockdown measures have further dented an economy struggling with unemployment, high poverty levels and massive government debt. Argentina has been in recession since 2018.