from the Argentina Independent..
By Sophie Rawe
01 July 2013
The controversial tax amnesty law began being effectively implemented today, with the dollar-denominated bonds officially going on sale.
Law 26,860 was passed on 30th May, and allows savers with undeclared dollars and overseas assets to invest in development bonds in the energy and real estate sectors without fear of tax penalties or legal sanctions.
When launching the plan back in May, Economy Minister Hernán Lorenzino said the measure was “aimed at those who have undeclared savings in dollars so that they can invest them in transparent and legal instruments that will both protect those savings and use them to support these two sectors.”
The undeclared money must be invested into either of the two dollar-denominated bonds: the Investment Deposit Certificate (Cedín), or the Argentine Energy Development savings bond (BAADE). Citizens have 90 days – until the end of September 2013 – to declare the money in order to regulate their financial situation before tax authorities.
With the creation of the Cedín, the government appears to be trying to reactivate the construction and real estate sectors, after having effectively halted them when dollars were restricted. Companies that accept Cedín receive its equivalent in dollar tickets instantly in return.
The BAADE, for its part, seeks to attract public work funds for the energy sector, whose importation costs have become the main financial burden of public finances.
The Security and Exchange Commission (CNV) Chairman Alejandro Vanoli explained earlier today, as the Cedín dollar-denominated bonds were officially launched, that the bond “is not a foreign currency but a saving instrument.” He further argued that the Cedín bond “is an alternative instrument of investment for both the real economy and the financial sector. Primarily, it will provide investors with alternatives to make real estate transactions or to strengthen the construction sector which at the same time has many effects on other sectors.
“It will ease the purchase of other actives to be considered such as used homes, lands and offices and will give the economy an interesting level of liquidity, as exchange offices are allowed to use them. It will activate consumerism,” he explained.
The latest association publically expressing their support is the Argentine Bank Association (ADEBA), which published an advertisement in several national newspapers yesterday with the slogan “this is an investment instrument that will develop national savings”.