The spider’s web of country tax has once again snared a new contributor. Starting today, this tax will apply to the purchase of foreign currency and cover companies transferring dividends trapped in stocks to their parent companies. Market estimates suggest that there are US$7 billion trapped in stocks that should be transferred abroad. These transfers had been halted under the previous government, but the current administration has enabled their use through Bopreal bonds.
The operations carried out with Bopreal will now incur a 17.5% tax rate, which could result in an additional US$1 billion in revenue, according to economist Amilcar Collante. Since the PAIS tax is not shared, all revenue from these transactions goes directly into the national coffers. In the first quarter, this tax contributed 10% of the total collection.
Originally set at 30% on dollar operations and ticket purchases, the PAIS tax has been extended to also tax imports at a rate of 17.5%. This year-on-year increase in March demonstrated its growing importance in national revenue. Despite being scheduled to expire in December, the PAIS tax has become a crucial tool for the government to maintain a surplus. The future of this tax is uncertain as the government navigates economic challenges and the possibility of exchange rate unification. Critics have raised concerns about its impact on businesses and investments.
The PAIS tax is now central to the government’s revenue stream, with some estimates suggesting it could raise up to 1.7% of GDP if maintained throughout the year. As the government seeks to manage its fiscal accounts, it may need to consider alternative sources of revenue in the future. Overcoming dependency on this tax will be a critical task in coming months.
In summary, starting today, companies transferring dividends trapped in stocks will be subjected to a new spider’s web of country tax on foreign currency purchases and Bopreal bond operations that carry out import transactions at a rate of 17.5%. Despite being scheduled for expiration, this tax has become an essential tool for maintaining a surplus due to its growing importance as part of national revenue streams.
However, critics have raised concerns about its impact on businesses and investments while economists predict an additional US$1 billion if it continues throughout
