Argentines could soon be motivated with tax incentives to declare their crypto holdings as the government aims to tackle money laundering with a proposed bill.
Argentina’s Ministry of Economy, the country’s economic policy maker, has introduced a bill to encourage Argentines to report their cryptocurrency holdings by promoting a reduced tax rate.
To fight money laundering, Economy Minister Sergio Massa introduced the debt to “Argentine security debt” according to a January 6 report from the Errepar region.
The bill would require crypto holders to issue a certificate of ownership – a legal statement detailing where their holdings are with the government. The bill proposes tax incentives to encourage citizens to declare their assets.
Individuals who report their holdings within 90 days of the law’s commencement will only pay a 2.5% income tax on their crypto holdings. This tax rate will gradually increase every 90 days until it reaches 15%, the local tax rate on capital gains.
The bill also seeks to encourage Argentines to report holdings of other financial assets based on monetary value such as fiat money, stocks, shares, real estate, and even furniture. The proposed law would require domestic and foreign assets to be deposited in licensed banks in Argentina or foreign banks regulated by the central bank or the securities commission.
The bill will be tabled and discussed during the next session of parliament. Emerging markets are hotbeds of crypto adoption, with Argentina ranking 13th overall in blockchain data company Chainalysis’ 2022 Global Adoption Index.
Argentinians were drawn to crypto because of its high value in the country and its ease of use for cross-border transactions. Argentina’s inflation rate will reach 72.4% in 2022 according to data from Statista.
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