Today, as I was preparing for my flight from Scotland to Mexico, I read the news about what was happening around the globe and one headline stopped me dead cold: “The Argentinian government is increasing the tax for all purchases made abroad from 20% to 35%”.
As I worked and traveled in Argentina during the first half of this year, this particular news really shocked me. First, let me explain in broad strokes the current conditions of the Argentinian economy and how the middle-class is getting, as usual, the short end of the stick.
The many different colors of dollars in Argentina
Because of an ambitious, and by all definitions populist, government-led program, the exchange value of USD to AR peso is set at a fixed rate. This brings benefits to government purchases and other national (and personal) interest but at the same time, it really hurts the middle-class citizens, as they want to save money, either by purchasing property or a stable currency such as the USD. However, the average Argentinian citizen CANNOT legally purchase USD.
Yes, this might come as a real shock to you. It sure was to me. You and me are probably used to free-market policies where people are free to do whatever they want with their money without being forced to invest in buying (overpriced) stuff at their own countries. While it is often labeled as the “Paris of the South”, Buenos Aires is sure shaping to become the “Havana of the South”.
If you are an Argentinian and you want to travel abroad you have to purchase your plane tickets with an overcharge tax of 35% and then apply (up to 7 days before your departure) to buy dollars at the National bank with an exchange rate higher than the official one.
As I’m writing this, the official rate is (which nobody can legally buy from banks) 6 AR to 1 USD while the Tourist Dollar is 8.5 AR to 1 USD. The black-market dollar, nicknamed the “Dollar Blue” is fluctuating from 9 to 10 AR to 1 USD. The exchange for transactions regarding real state and cars is situated somewhere in the middle between the Dollar Blue and the official rate.
The only reason I was able to afford traveling to the mysterious Easter Island last June is because I used my French savings account to purchase the plane tickets departing from Buenos Aires, I sincerely cannot imagine any hard-working middle-class Argentinian being able to afford such thing with this 35% tax and it truly saddens me.
The Middle Class and the Privilege of Travel
While, from a completely objective point of view, I can understand WHY the government wants to tax traveling abroad, my heart will always go to the middle-class that, just like me, view travel as the best investment in the world.
Sure, the government wants to cash-in in all of the shopping that Argentinians do in Miami as well as encourage Argentinians to be tourists in their own country, from the amazing wildness’s of Iguazu’s Falls to the marvelous vastness of the Patagonia region, and yet, people SHOULD have the liberty of choosing where they want to spend their money and time without having to pay exorbitant taxes to the government just because they want to explore new regions of the world other than their home country.
As I read the comment section of this news, I was saddened to see how many middle-class citizens share their stories and their disappointment to this new reform. Sure, many of them wanted to travel to buy not-so-expensive electronics, clothing and other gadgets.
Who can blame them? A Nikon photo camera can cost thrice as much in Argentina than in the UK. Some other expats that have been living in Argentina for years are now unable to visit their families this Christmas. Is visiting family members during holidays a luxury?
The sad part of this tale is that high-class citizens aren’t affected by this since they have so much money that a little increase in the tax for goods and services purchased abroad (a tax that, as far as I know, doesn’t exist in any other country that I’ve visited) doesn’t affect them at all while low-class citizens don’t have the money to travel even within their own country.
So, the only affected are the middle-class who want to spend their money in the best investment of them all: Travel.
Is Travel a Right or a Privilege?
In my opinion it is neither and both at the same time. No, I’m not about to unleash a philosophical techno-babble, just hear me out.
During the last couple of years I have visited 35 countries and while I am truly grateful for this opportunity that life has offered, I also consider that people from all backgrounds have both the right and the duty to broaden their minds and improve themselves by expanding their knowledge in order to help the general betterment of their societies.
Some people do this by reading, others by acting out while a few others, like me, do this by grabbing their backpack and leaping unto a new lifestyle that should (and will) eventually lead to a profound understanding of the human race as a whole.
And, while I do not believe that a government has the DUTY of providing the tools for this task (and yes, I truly admire government-led initiatives that do this such as the wonderful Erasmus program in Europe), I sure believe that a government should NOT discourage people to do it by using taxes and other policies to keep people trapped within their own borders.
Sure, Argentina is no Cuba or North Korea but…it might as well become one in the next decades if it continues with these kind of policies against globalization and free movement of its citizens.
Now that I’m back to Mexico for at least the next couple of months, I am truly thankful that, despite the fact that my home country doesn’t provide us citizens with the same rights, privileges and opportunities as countries of the First-World, it allows us to be whoever we want to be. It allows us to invest in whatever we want to invest. And most important of them all, it allows us to travel wherever we want to travel to.
In the end, that’s what freedom is all about, no? What is your opinion on this subject? Do you think travel is a right, a privilege, both? Share your thoughts and let’s start the debate!