Erin Callan & Ethan Hutson
March 7, 2013
Business Report on Argentina
Argentina is located in South America and borders Chile, Bolivia, Brazil, Paraguay and Uruguay. Argentina has a total size of 2,780,400 square kilometers, with 2,736,690 of those square kilometers being land, 43,710 square kilometers being water and 4,989 kilometers being coastline. Based on its total size, Argentina is the second largest country in South America, and the eighth largest country in the world (state.gov). The terrain of Argentina includes rich plains of the Pampas in the northern half, flat to rolling plateau of Patagonia in the south, rugged Andes along the western border. The highest point in Argentina is Cerro Aconcagua which is 6,960 meters and the lowest point is Laguna del Carbon, which is -105 meters. The natural resources found in Argentina include lead, zinc, tin, copper, iron ore, manganese, petroleum, and uranium (Country Profile).
Europeans arrived in what is present day Argentina in 1516 at the hands of Spanish navigator, Juan Diaz de Solias. Spain established a permanent colony in present day Buenos Aires in 1580. On July 9, 1816 Argentina formally declared independence from Spain and in 1853 a modern constitution was officially declared and a national unity government was established in 1861. Between 1880 and 1930 Argentina was one of the ten wealthiest nations because of the expansion of agriculture and foreign investment in infrastructure. The Great Depression halted Argentina’s expansion and brought with it a period of a less stable governance. In 1973, Argentina held its first general election in ten years and in 1983 Argentina returned to a democracy (Encyclopedia Britannica). The Argentinean flag consists of three equal horizontal bands of light blue, white, and light blue. Centered in the white middle band is a sun with human face. This sun is known as the Sun of May. The light blue and white colors represent the clear skies and the snow on the Andes Mountains and the sun commemorates the appearance of the sun through cloudy skies on May 25, 1810 during the first demonstration in favor of independence (cia.gov).
In 2012 it was estimated that Argentina’s gross national product was $474.8 billion with a real growth rate of 8%. It was also estimated in 2012 that the purchasing price parity for Argentina was $746.9 billion, ranking twenty second in the world.
The political system in Argentina is that of a republic. The executive branch consists of a president and a vice-president, and a cabinet appointed by the president. The legislative branch consists of bicameral National Congress of the Senate, which has 72 seats. The judicial branch consists of a Supreme Court, made up of seven judges who are appointed by the president and approved by the Senate. There are two main political parties in Argentina, Peronist and Radical Civic Union, but there are also numerous smaller national parties (state.gov).
In an attempt to reduce outflow of foreign exchange and to encourage domestic production, the Argentinean government implemented several measures. The first states that before placing import orders, the Importers have to file an Anticipated Import Affidavit Declaracion with the Tax Authority AFIP, which is expected to make a decision within 72 hours. Importers are asked to export a dollar worth of goods for each dollar of imports. The importer might also be asked to reduce prices or quantity of imports (cia.gov). In a recently published article, the people of Argentina were polled and seventy-four percent of them said that “large companies have too much influence on the decisions of their government” (canadaone.com).
Business & Personal Taxes
In Argentina, business taxes are 35% and are based on taxable profit. The total tax rate for businesses is 2.7% of profit (doingbusiness.org). Personal...
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