Argentine government eyes hidden billions to pay pensioners

Argentine President Mauricio Macri announced an amnesty on an estimated US$500 billion of unregistered funds stashed abroad to pay pensioners and help fund a multibillion-dollar infrastructure program.

The funds will pay a tax of between zero and 15 per cent depending on the amount and when they are brought back into the country, the government said. Argen- tina needs to raise 47 billion pesos (US$3.4 billion) to pay legal judgments awarded to pensioners, and another 75 billion pesos a year to pay higher pensions in future.

“Today with this law we’re sending to Congress we’re seeking to repair years of injustice because we’ve found lots of situations where pensioners have made legal claims, won judgments and yet the state persists in seeking any trick to avoid paying,” Macri said in a televised speech.

Macri will have to overcome people’s mistrust of the Argentine authorities for the amnesty to be a success. During the default of 2001, the government restricted bank withdrawals and converted people’s dollar savings into pesos during a period in which the local currency collapsed 75 per cent. Still, an international tax-sharing agreement that begins in 2017 will make it much more difficult for Argentines to continue hiding funds abroad, Finance Minister Al- fonso Prat-Gay said.

The tax amnesty “is the first that rewards those who were up-to-date,” Prat-Gay said Friday. “We’re offering this last opportunity because from January the tax agency will have all the instruments it needs to search for that money in any part of the world.”

Argentines held approximately US$400 billion in offshore assets in 2012, according to to calculations by the Economic and Financial Centre for the Development