Argentina’s Ministry of Economy, responsible for the country’s economic policy, has drafted a bill to encourage Argentines to declare their cryptocurrency holdings by incentivizing reduced tax rates.
The bill would require crypto holders to produce an affidavit – a sworn statement identifying the whereabouts of their holdings to the government.
The bill proposes tax incentives to encourage citizens to declare their assets.
Those who voluntarily report their holdings within 90 days of the law taking effect will only pay a 2.5% capital gains tax on their crypto holdings. This tax rate will gradually increase every 90 days until it reaches 15%, the country’s standard tax rate on capital gains.
The bill also aims to encourage Argentines to report holdings of other financial assets subject to capital gains such as fiat currency, stocks, shares, real estate and even furniture.
The proposed law would require domestic and foreign assets to be deposited in licensed banks either in Argentina or in foreign banks regulated by that jurisdiction’s central bank or securities commission.
The bill will be tabled and debated during the next parliamentary session.
Emerging markets are a hotbed for crypto adoption, Argentina ranked 13th overall in 2022 Global Adoption Index from blockchain data company Chainalysis.
Argentinians were attracted to crypto due to the high inflation in the country and its ease of use for cross-border transactions. Argentina’s inflation rate almost hit 72.4% in 2022 according to Statista Data.