The government of Argentina which is in deep financial trouble and very little cash has mandated all the banks to report every credit card purchase to the tax authorities. The government has also announced a 15% tax surcharge every time a credit card user makes a purchase outside Argentina. The rule also includes all transactions made via debit cards and purchases done over any online site such as Amazon and eBay outside the country.

The move is aimed at identifying people who are using credit cards to make purchases at the official rate instead of the black market rate. A lot of capital is moving out of Argentina due to its depreciating currency and aggressive currency control measures.

As the government tries to close off \all avenues for people to legally convert their pesos into US dollar, the black market peso price has spiked. The proposed 15% tax surcharge is expected to close some gap between the regulated official rate (4.63 pesos per dollar) and the rate prevailing in the black market (6.39 pesos per dollar)

On paper, the new surcharge is an advance payment as it will be adjusted against the future taxes of a person. However, its real value will get eroded due to inflation. Also it cannot be adjusted in case of people who don’t earn enough income to come under the tax ambit.

According to Associated Press’ Michael Warren, the new measures are powerful tools aimed at combating tax evasion. The tax and custom agencies will now be able to compare the income declarations of people with their credit card bills. As per earlier rules people were required to report only expensive charges of over 3000 pesos, but the new rule calls for  reporting of each purchase by every co signor. So people who engage in significant credit card purchase while claiming to have low income could get caught.

These new measures by the Argentina government have been termed as crudely protectionist by the Socialist President Jose Mujica of Uruguay. He was speaking in a radio interview from Montevideo.

The new measures are aimed at stripping residents of their transactional and financial privacy. However, people who wish to bypass these currency controls and protect their money from government induced inflation can buy and sell bitcoins for Argentine peso through the Buenos Aires Exchange Community. People can also buy bitcoins for Ukash vouchers via the mercaBit.eu exchange.