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Argentina, U.S. affirm ties with new tax information deal
December 23, 2016 / 1:46 PM / a year ago

Argentina, U.S. affirm ties with new tax information deal

BUENOS AIRES (Reuters) - Argentina signed a tax information exchange agreement with the United States on Friday aimed at helping the South American country repatriate overseas assets and signaling Washington’s approval of President Mauricio Macri’s free-market reforms.

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

U.S. Treasury Secretary Jack Lew visited Argentina in September, nine months after former soccer mogul Macri took office and ended more than a decade of haphazard policymaking that scared off investors and raised tensions with Washington.

“This agreement furthers Argentina’s reintegration in the global economy and marks an important next step in the new era of the U.S.-Argentina relationship,” Lew said in a statement on Friday.

It was the latest sign of thawing bilateral relations after eight years under previous President Cristina Fernandez, a critic of Washington who feuded with big business and expanded government’s role in Latin America’s third-biggest economy by implementing heavy trade and currency controls.

Macri was inaugurated a year ago, promising a revamp of government that would attract waves of foreign capital. But investors have largely remained on the sidelines as the finance ministry struggles to pull the economy out of recession and the central bank grapples with 40-percent inflation.

Argentine President Mauricio Macri (2nd L) and Argentine Finance Minister Alfonso Prat-Gay (L) hold a meeting with U.S. Treasury Secretary Jack Lew (2nd R), in Buenos Aires, Argentina, September 26, 2016, in this handout photo provided by Argentine Presidency. Argentine Presidency/Handout via REUTERS

His government is betting a tax amnesty program that opened in August can bring in capital crucial to restoring growth. Argentines hold an estimated $400 billion of undeclared assets abroad, and those declared by the end of March will be taxed at a maximum 15 percent rate.

President Barack Obama and Secretary of State John Kerry visited Argentina during the first months of the Macri administration. Despite previously saying he supported Democrat Hillary Clinton, Macri was one of few Latin American leaders to speak with Donald Trump after his election as U.S. president.

The signing of the tax information deal came two days after the United States said it would lift a ban on imports of lemons from Argentina, allowing growers in the world’s top producer to access the largest consuming market for the first time in 15 years.

”It is our hope that such actions will make a meaningful contribution to the efforts of President Macri’s government to rebuild institutions, re-establish credibility, improve governance, and implement structural reforms,” Lew said in a statement.

Argentina’s finance ministry said in a statement the agreement would help the government identify undeclared assets in the United States as well as combat money laundering and the potential financing of terrorism.

Reporting by Hugh Bronstein; Editing by Lisa Von Ahn and Bernadette Baum

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