October 31, 2016 / 2:52 PM / 10 months ago

Argentines declare $4.6 billion in first tax amnesty deadline

Argentine Finance Minister Alfonso Prat-Gay speaks during a forum of policymakers and business leaders in Buenos Aires, Argentina, August 10, 2016.Enrique Marcarian

BUENOS AIRES (Reuters) - Argentines have declared some $4.6 billion in cash in the first phase of a tax amnesty plan, the finance minister said on Monday, a test of interest in declaring other assets needed to boost revenue and jump-start economic growth.

Argentines had until the end of the day to open bank accounts and can deposit cash stashed in safety deposit boxes and under mattresses until Nov. 21, so the final amount declared during the first phase will likely increase.

One banker had said the first phase would bode well for the broader amnesty if $5 billion to $6 billion is declared. The plan allows participants to pay a fee and avoid prosecution for tax evasion.

"This vote of confidence is very important, that around 100,000 Argentines have decided to regularize their holdings in cash," Finance Minister Alfonso Prat-Gay said.

Argentine President Mauricio Macri speaks during news conference at the Olivos presidential residence in Buenos Aires, Argentina, September 28, 2016.Marcos Brindicci/File Photo

The focus will now shift to efforts to formalise an estimated $400 billion in assets abroad, a process that will influence how much debt President Mauricio Macri's government needs next year and when Argentina's economy emerges from recession.

Argentines are interested in the program, but are likely to wait until deadlines on Dec. 31 and March 31 to declare assets abroad, lawyers and accountants said.

"Everybody at this point is preparing. I don't know anyone who's ignoring this and not taking it seriously," said Alan Lips, a partner at accounting firm Gerson Preston in Florida.

Under the amnesty, Argentines can either repatriate money and invest it in low-yield bonds to help finance infrastructure projects or declare assets but keep them abroad and pay a one-time fee and subsequent annual taxes.

Estimates of the value of assets ultimately declared range from $20 billion to $80 billion, and local banks are setting up accounts and offering loans to cover the fees.

Reporting by Luc Cohen, Caroline Stauffer and Walter Bianchi; Editing by Dan Grebler and Meredith Mazzilli

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