The crypto sector of Argentina is facing a threatening challenge, courtesy of a tax system established in 2001. Argentina’s debit and credit tax imposes a staggering and steadfast 1.2% duty on every transaction in crypto trade.
This rule contradicts the interests of the local providers. However, the traditional financial institutions and the international giants in the crypto sector don’t feel the wrath of it!
What Happened?
In 2021, the crypto sector appealed for a downsizing of this taxation norm. Meanwhile, the rate was reduced by 0.075% due to the internet industry links.
However, the latest reports suggest a revised ARCA tax output. It could mean that the whole tax might apply to the industry players, thus exposing them to more risks! In the long run, it could be disastrous for the industry, since the tax rates are higher than the transaction fees charged.
What Now?
In addition, the retroactive relegation of the tax to local operations might spell doom for many people. It can also force them to stall their operations as they can no longer pay their taxes.
Sources say that President Milei is planning to formulate an executive order to fix the problem. This could also be in line with his administration’s libertarian and anti-tax policies. However, the proposition was scrapped due to his participation in the Libra scandal.
