Foreigners Cannot Buy Travel In Pesos??

[Rich One]

If travel agents could sell dollars income in the black market, how could they enter this illegal revenue in their accounting ledgers ... I wonder?

 

[glasgowjohn]

which set of accounting ledgers are you Referring to ? A, B or C

 

[toongeorges]

There will be millions of What if's .. the old lady that rents a room .... well the AFIP will put her in jail... jejejej

No, they will be content with a fine.

 

[toongeorges]

No opinions about the question I posted earlier in the thread? Do you think this might be the first step in a 2-part plan, the second step being to force the tourist industry agents to convert their dollar income back into pesos at the official rate?

You mean Argentina is moving back to freefloating its currency, only requiring a hefty tax on each transaction? Maybe. However, I think such intervention would fail as well. The dolar blue will continue to exist to avoid the transaction tax. Up to recently, Argentina collected 108% of the official profits in the country as taxes, which shows Argentina is not good at enforcing taxes (on all profits). With such measures, tax avoidance will only increase, so no, it will never be enforced at all hotels. What will happen instead is that hotels (and other touristic services) suddenly have almost no customers, make huge losses, yet continue operating, that the government collects less taxes and that mysteriously the black market grows enormously. Who knows, maybe officials are planning that their next carreer move should be either tourism or the black market, since they feel leading the people their way is getting out of fashion?

 

[Sleuth]

@Sleuth - Thanks for the most clear explanation yet. Makes sense. Sounds like they are basically closing off the arbitrage options many people were taking advantage of in regards to travel packages and airline tickets.

IMHO this measure is purely to help the central bank maintain their dollar reserves. What is most telling is this was decree was issued by the central bank, not AFIP.

I think there is a lot of overreaction to this measure. For the expat community, it means airline tickets will be more expensive if you had paid in cash at the blue rate, but I doubt they will see much else. (Airlines already prohibited buying tickets in Argentina for flights that did not originate/arrive in Argentina.) Tourists to the country will still use Xoom or convert at the blue rate if they do their research in advance.

 

[ElCordobés]

I have spoken to two agencies that I know well. They aware of the rule and both will continue selling to foreigners in pesos until they are told to stop. I am a permanent resident, but posed this as in the context of a non-resident/tourist. This could change any day, of course, but it's still fine for now. A friend of mine bought a LAN ticket in ARS by paying a PagoFacil yesterday...who know whether that will continue.

 

[jackbower]

Maybe you misread my post sleuth. I never said it was aimed at permatourists. I said the permatourists on this board are the ones complaining. Obviously the government is doing this to close loop holes for the people trying to get free lunches. I agree with this move. That is all.

This is not aimed at the (relatively small) permatourist community, even though we all think that is the whole world here. It is aimed at the visitors from neighboring countries (Uruguay and Chile) who are buying travel packages and airfare in pesos at the blue rate - even with the 20% tax it was still a deal. "Come to Argentina and buy your trip to Disneyworld, you'll save 30%!"

This is also not going to affect local tour companies, bus services, car rentals, etc. This is for the travel businesses who need to get their money outside of the country and have to convert to USD or other currency through the central bank in order to pay suppliers (foreign airlines, hotels, etc). Those who do not need money outside of the country will be happy to accept pesos without ever having to go to the central bank.

This is why I said I had doubts that hotels are affected. The smaller local hotels never deal with the central bank. Larger chain hotels may be a different story, especially if they want to take profits out of Argentina.

 

[toongeorges]

Effectively the dollars need to get back into the official money supply somehow.

No they are not. As I see it, Argentines are effectively hoarding dollars, since it is their best option at saving. The dollar loses almost no value over time compared to everything else. You get more pesos for it over time. There are no dollars flowing in (except from naive tourists). What I fail to see is how "milking" the tourists would make them spend more. Let us not think about the future, let us just try to grab what we can now.

 

[jackbower]

We cannot all pull the average IQ up

no, there was simply no value in your rant.

 

[Dublin2BuenosAires]

No they are not. As I see it, Argentines are effectively hoarding dollars, since it is their best option at saving. The dollar loses almost no value over time compared to everything else. You get more pesos for it over time. There are no dollars flowing in (except from naive tourists). What I fail to see is how "milking" the tourists would make them spend more. Let us not think about the future, let us just try to grab what we can now.

I think you are answering a question I didn't ask? No they are not what? I said that the dollars have to get back into the official money supply, i.e. into the real taxable economy. That would be the objective of any policy of any government here, different ways to achieve it but of course no politician in Argentina wants an uncontrolled currency black market which has no benefit to the public purse. Obvious enough. I am not saying this is the way to do it, far from it, but it is the objective.

I think your perspective is a little skewed, milking the tourists? These tourists already access prices, via the blue rate, which are not accessible to people earning in pesos. This equation must be balanced. 6 approx and 10 approx respectively should become 8 in my view.

How to achieve it? Well, not like this, after that I'm not sure I have the answer.