World 03-07-2018

Argentina: Exchange pressure

Marcos Peña acknowledged that the Government evaluates increasing the tax on tickets abroad

"It's on the table" said the Chief of Staff. He attributed it to the deficit in the current account.

What a few days ago was a rumor on Tuesday ceased to be: the head of the Cabinet, Marcos Peña admitted that the government is evaluating raise the rate of tax on travel abroad and attributed to the deficit presented by the current account of the economy.

" The possibility of discussing taxes on tickets abroad is on the table , some sectors are considering it because of the current account deficit, but it is one of the things that will be analyzed in the context of a broader discussion of how reach fiscal balance "he said.

The current tax rate for airline tickets is 7% after the increase applied by the Government in January 2017 when that rate was 5%. Later through Twitter Peña clarified that the government does not believe that the solution to the problems "is raising taxes" although he confirmed that the issue is one of the proposals that will be discussed.

Also in the Casa Rosada clarified to Clarin that the option is to modify the tax rate that already exists, or a way to save the sayings of this Monday from the Minister of Finance Nicholas Dujovne who had assured investment banks that were not analyzed new taxes.

In statements to Radio La Red the minister also described as "nonsense" the possibility of dollarizing the economy and denied that there is a collapse of the economy because "there is talk of a growth of between 0.5% and 1% for this year . "

In this context Peña attributed the strong increase of the dollar to "a foreign exchange system that is floating, is seeking its balance " and rejected that it is a sign of "distrust" of the markets.

"The solutions to the doubts do not go through what the outsiders say but what the outsiders do. That is why the President has been very clear on the need to embrace all together the path towards fiscal balance "he stressed.

After reiterating that the economy is going through "turbulence" the coordinating minister denied that there is a collapse of the economy since he said "a growth of between 0.5 and 1% is expected for this year".

"We must recognize that it is a turbulence that must be managed we must not minimize it. But we do not have to think that we are facing a structural crisis with no remedy or a failure "he said.

In addition he highlighted the increase in tax collection, which rose by 31.9% year-on-year in June and said that it reflects "an increase in activity since in that period inflation was 27% ."

Despite the inconveniences Peña denied that it is the most complicated moment for the Government since the inauguration in December 2015. "The most difficult moment was when we started that was the worst economic moment for this government to receive what was called the plan bomb. There were doubts whether it was possible to move the country forward without a crisis and showed that it was possible primarily from the trust awakens Mauricio Macri in Argentina and the world, which continues to support and support ".


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