Argentina has removed value added tax (VAT) on lodging and breakfast services for foreign travelers in a bid to boost its sagging tourism industry and generate jobs.
With inflation hovering at a record 40%, Argentina looks expensive, even for foreign tourists. The South American country normally imposes 21% VAT on high-end accommodations, so this is good news for travelers.
Analysts say the tax concession will help tourists save nearly one-fifth of the money they spend on lodging and breakfast in the country.
The tax-break applies to all forms of accommodations, ranging from five-star hotels to rural ranches and vineyard resorts.
“VAT on hotel stays and other accommodation will automatically be refunded for international visitors who pay with a foreign credit card or via bank transfer from another country,” country’s Tourism Department has stated.
To take advantage of the rebate system, tourists need to prove that they live abroad by showing a valid passport or identification card.
Tax on other hotel services will not be refunded and will be billed separately. And the process is completed at the time of billing, with no need for any extra paperwork after the visit.
With its peso declining continuously, Argentina is seeing an urgent need to attract foreign visitors and their stronger currencies.
Government says the tax benefit will bring in an additional 120,000 tourists and help it create at least 8,000 jobs. International tourists contribute about $90 million to Argentina’s economy every year.
Argentina is in fact a bit late to this game. Several South American countries – including Chile, Uruguay, Peru, Ecuador, and Colombia – have long been offering similar incentives.