Luis Caputo explains what the PAIS tax cut will look like and how much the dollar will be worth

What is country tax

The PAIS tax is a tax paid on certain operations in foreign currency. It was created in 2019 by the Alberto Fernández government for certain actions aimed at discouraging purchases and expenses in foreign currency in order to prevent the outflow of foreign currency.

This tax is applicable on the following activities:

• Purchase of foreign currency for savings, including traveler’s cheques. Tax is not paid in case of payment of loans and obligations.
• Purchases made with credit and debit cards, the latter when the account from which the funds are debited is in Argentine Pesos.
• Payments for goods or services abroad by credit card or debit card in pesos, and withdrawals of foreign currency when they are in pesos from an account.
• Payment for transport services abroad, except for neighboring countries.

What did he say about the dollar?

“The free exchange rate is going to be converted into the official one due to a shortage issue, and that is going to be a more appropriate point to exit the stock, because as we say, we don’t want to exit too early. If we had left in December, it would have been a disaster… You can’t fix a date because inevitably actors are going to speculate, which will work against the country and it will mean that we won’t be able to get out of the trap. That’s why the decision is to do as we are doing, with a strong fiscal program, with a strong monetary program and gradually lift the layers,” he explained about the exchange rate.

At the same time, he once again denied that a new devaluation would occur (“zero chances,” he said) and He even said that as the months go by, the peso will be the stronger currency of the system.

“What we are doing has been carefully studied for a long time and we are executing it satisfactorily. The situation we are entering now will surprise many. I said this in January, when I said the peso would be in short supply in a few months. AndIt will start to feel like this in some time,” he said.