With the promise of reduced tax rates as an incentive, a measure encouraging citizens to register their crypto holdings has been developed by the Ministry of Economy in Argentina.
The “Externalization of Argentine Savings” draft legislation, which aims to fight money laundering, was presented by economics minister Sergio Massa, according to a Jan. 6 article by regional publication Errepar.
The measure would force cryptocurrency owners to provide the government with an affidavit, which is a sworn declaration indicating the location of their assets. To encourage people to disclose their assets, the measure suggests tax incentives.
Within 90 days of the law’s implementation, those who voluntarily reveal their holdings would only be subject to a 2.5% tax on the capital gains on their cryptocurrency investments. Every 90 days, this tax rate will grow slightly until it reaches 15%, the nation’s regular capital gains tax rate.
Additionally, the measure seeks to persuade Argentines to disclose their ownership of other financial assets that are subject to capital gains taxes, such as fiat money, stocks, bonds, real estate, and even furniture.
The proposed legislation would require all holdings, local and international, to be put into authorized institutions, either in Argentina or in foreign banks governed by the central bank or securities commission of that country.
In the next legislative session, the measure will be introduced and considered.
Argentina is ranked 13th overall in the 2022 Global Growth Index by blockchain analytics company Chainalysis, demonstrating how emerging nations are a hotspot for cryptocurrency adoption.
The high rate of inflation in Argentina and the simplicity of using cryptocurrencies for international transactions have drawn Argentines to them. Statista estimates indicate that in 2022, the inflation rate in Argentina will nearly reach 72.4%.
