Argentines may soon be motivated to declare their crypto holdings by tax incentives, as the government plans to combat money laundering with a proposed bill.
Argentina’s Ministry of Economy, the country’s economic policy manager, has drafted legislation to encourage Argentines to declare their cryptocurrency holdings by offering tax breaks.
According to a Jan. 6 report by local outlet Errepar, the “Externalization of Argentine Savings” draft law, aimed at combating money laundering, was introduced by Economy Minister Sergio Massa.
The bill would require cryptocurrency holders to provide the government with an affidavit — a sworn statement identifying the location of their holdings.
The bill proposes tax breaks to encourage citizens to declare their investments.
Those who voluntarily declare their holdings within 90 days of the law’s implementation will pay only a 2.5% tax on their crypto holdings’ capital gains. This tax rate will rise incrementally every 90 days until it reaches 15%, the standard capital gains tax rate in the country.
The bill also encourages Argentines to declare holdings of other financial assets subject to capital gains taxation, such as fiat currency, shares, stocks, real estate, and even furniture.
The proposed law would require both domestic and foreign holdings to be deposited in approved banks in Argentina or foreign banks regulated by the central bank or securities commission of that jurisdiction.
The bill will be introduced and debated during the next parliamentary session.
Argentina ranked 13th overall in Chainalysis’s 2022 Global Adoption Index, indicating that emerging markets are a hotbed for crypto adoption.
Argentines have been drawn to cryptocurrency due to the country’s high inflation and the ease of use for cross-border transactions. According to Statista, Argentina’s inflation rate will nearly reach 72.4% in 2022.
