New wealth tax passed in Argentina to help fight the pandemic

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A new tax, which is geared at the wealthiest people in Argentina, was passed on Friday.

The bill, which is dubbed the “millionaire tax” was passed in the Senate 42 votes to 26 and will offset the purchasing of personal protective equipment and other medical supplies to help fight the pandemic.

Those with assets worth more than 200 million pesos ($2.5m; £1.8m) – some 12,000 people – will have to pay.

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.

The South American country has been devastated by the virus with almost 1.5 million infections and almost 40,000 deaths. In October, Argentina became the fifth country in the world to record one million confirmed cases becoming the smallest population to do so at the time.

With an economy in recession since 2018 as well as high unemployment, high poverty levels and massive government death, the Coronavirus has further crippled the economy with months of lockdowns restricting any possible recoveries.

The government led by Alberto Fernandez hopes to raise 300 billion pesos however the opposition says it will discourage investors, and that it will not be a “one-time tax.

Centre-right party Juntos por el Cambio reportedly described it as “confiscatory”.