Credit Chasers

With her country's economy still stagnating, Argentina's semi-hot socialist leader has found a new way to get "revenue":

Argentina just made it more expensive for its people to use credit cards outside the country, and more dangerous for cardholders who aren't paying all the taxes they should.
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The moves target Argentines who have discovered that by using credit cards outside the country, they can get around increasingly tight currency controls and shelter their money from soaring inflation. Purchases outside Argentina using peso-denominated cards soared 48 percent in June compared to the year before, obligating the central bank to send $289 million out of the country in just one month. Overall capital flight soared to $23 billion in 2011.

AFIP chief Ricardo Etchegaray, the government's top tax collector, presented the moves as populist measures that would only affect the wealthiest Argentines, and mainly when they travel outside the country - a reduced group of 168,000 taxpayers who charged $1.5 billion in the last 18 months.

But a closer look shows the measures go much farther, giving the government powerful new tools to combat widespread tax evasion.

Tax and customs agents now will be able to compare better what Argentines declare to the customs and tax agencies with what their credit card bills say. Before, the reporting requirements applied only to expensive charges of more than 3,000 pesos (about $645). Now, every single purchase by every co-signer must be reported. And if the totals show people are living large while claiming to be paupers, they could get into big trouble.

At the rate things are going in Argentina, they might not have to just claim to be paupers anymore...