Changes to the Tobacco Regime

Title VIII of the Law Bases and Starting Points for the Freedom of the Argentine People incorporates, in its Chapter I, a series of modifications to Law 24674 of Internal Taxes Applicable to Tobacco.

First, the new Law incorporates provisions regarding the consumer sale price, establishing that when the price tax subjects report is not suitable as basis to determine the taxable value, it will be determined using the price the Argentine Tax Authority determines. The Law clarifies that any price tax subjects report that is at least 20% lower than the price resulting from the survey above must will not be a suitable basis, unless it is proven that the consumer selling price reported is a market price.

The new Law amends article 15 of Law 24674, which established that cigarettes—both  imported and produced locally—would be taxed at 70% of the retail price, including taxes, except for VAT. The rate is now 73%.
Article 16 of the Law modifies the paragraph on the updating of the minimum amounts to be paid as tax for each cigarette or for each pack of cigarettes, establishing that these amounts will be updated quarterly, per calendar quarter, based on of the variations of the Consumer Price Index. The Executive Branch may—when economic circumstances require so for  fiscal sustainability—increase it up to 25%, or temporarily decrease it—if fiscal sustainability is not compromised—to 10%.

Finally, it modifies the sanction for transporting destemmed, conditioned, chopped, in strands, or reconstituted tobacco, or reconstituted powder for processing outside the authorized establishments and premises—regardless of its destination—without the corresponding transport documents or with irregular transport documents. In this sense, the Law establishes that a fine of the amount resulting from applying the 73% rate mentioned above will be imposed, in proportion to the quantity of cigarettes that result from dividing the total grams of transported tobacco by eighty cents, considering the time the infringement was detected.