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The “solidarity contribution” was voted on Friday by 42 votes to 26 in the Argentine Senate, after several polarized debates along the way, reports AFP. The government expects to receive the equivalent of just over 32 billion Swedish crowns, which will go towards hospital equipment and grants to the poor and small businesses.
Argentina has been greatly affected by the pandemic. Nearly 40,000 people have died and more than 1.4 million have been found infected, according to Johns Hopkins University. The pandemic has fueled already high unemployment and poverty in the country, which since 2018 has had a recession and huge public debt that it cannot pay off. The threat of a new financial crisis hangs over Argentines for several years.
On top of that, politicians introduced strict restrictions early on to curb the virus. The capital, Buenos Aires, was closed for more than 200 days and many residents suffered from depression and economic disaster.
The new single tax -Also called millionaire tax- applies to those who have assets of more than 200 million pesos, just over 21 million Swedish crowns. About 12,000 people will pay a progressive asset tax.
– The tax will be applied to 0.8 percent of all taxpayers, says Carlos Heller, one of those who developed the strategy.
Most of it will go to business aid, healthcare equipment, social initiatives and scholarships for students. The remaining 25 percent will go to fossil gas companies, the industry, which is important to the country and damaging to the climate, has dramatically reduced production during the pandemic.
Daniel Pelegrina, leader of the opposition party SRA, criticizes the Senate’s decision and suspects that the tax will continue even after the pandemic ends.
