Argentina’s Senate on Saturday approved and passed into law an emergency package which was announced by the new center-left government to try to lift the country out of its economic crisis.
The move is President Alberto Fernandez’s first legislative victory since he assumed office on December 10 after defeating Mauricio Macri in the presidential election in the South American country which has a poverty rate of over 40 percent.
The law entails imposing tax increases on sectors of the upper and middle classes as well as providing tax incentives for production and tax benefits to the most impoverished classes.
The new law was passed with the help of allies early Saturday by 41 votes in favour and 23 against and one abstention after a marathon 12 hours of debate in the country’s upper house.
The new law imposes a 30 percent tax on foreign currency purchases, payments and withdrawals made abroad either in cash or by credit card while maintaining a purchase cap of $200 per person per month.
It also urgently seeks financing to subsidize the country’s plan to provide free food cards for more than two million people in a country with 44 million inhabitants and with the worst economic and social indicators since 2001.
External debt in Argentina is roughly put at 90 percent of Gross Domestic Product (GDP), inflation is around 55 percent and unemployment is at about 10.5 percent.