Comment by ericol | Hacker News Reader

Comment by ericol | Hacker News Reader

Dude. Hold my beer.

In Argentina, pre pandemic there were people that actually went shopping to Miami, because getting anything Apple - be it an iPhone or a laptop - was cheaper that way.

The iPhone 12 is not for sale here, but let's use the iPhone 11 as an example. In the only "official" store I could find it [0], the price is 184.299 pesos (yes, 184 thousand). If you check the "official" US dolar rate [1] it is around 80 pesos.

But hear me out: The country has so little reserves, that officially buying dollars is limited to 200 dollars per person per month. If you buy something using your credit card outside of the country - be it online or in person - this limit does not apply, but in both cases you have "extra" taxes to pay (Buying or spending dollars is called "dolar turista"). the final rate for this is around 137 pesos (again, [1])

Let's use 140 as the CC rate, for rounding. Considering the same iPhone 11 is around 630 dollars in Amazon, the price in "dolar turista" is 88.060 pesos.

that still leave us around one hundred thousand pesos left to the current street price of the phone. considering I can currently get tickets to Los Angeles [2] for around 60K pesos, that more or less gives me ample room for having a short US holiday when getting the phone (Supposing I can get the VISA to enter the country ;) ).

BTW the reason for this phone to be so expensive is that there's a black market rate for the US dollar (Called the "blue" dollar) and it's rate is currently around 180 pesos. Using this rate, plus the normal taxes and stuff when importing things, we get close to the street price.

[0] https://tienda.personal.com.ar/iphone

[1] https://www.ambito.com/

[2] https://promociones-aereas.com.ar/2020/10/los-angeles-flexib...

I have often heard the anecdote of Argentinians flying to North America for shopping. But why is Chile not used for these purposes? Chile doesn’t have the import-substitution policies of Argentina, and in my visits to Chile I didn't feel that the country was not significantly more expensive than the USA.

Argentinians do go to Chile to get electronics. We just hear more often about them going to the US. Perhaps more go to the US for tourism, with a side benefit of cheaper electronics.

AS pradn stated, there was as well "shopping turism" going to Chile. Actually I just did a cursory search, and there was something posted an hour ago [0] about this.

[0] https://www.infobae.com/economia/2020/10/23/compras-en-chile...

South American countries bend over backwards in order to not tax income, so consumption gets taxed to ridiculous levels and these absurd situations arise.

And a foreign reserves crisis doesn't help either.

In Argentina thats not true. In fact you need $44.000 for a family to dont be considered poor. But if you earn more than $50.000 you start paying income taxes.

Does this tax work actually work? Surely the amount of people who actually pay the tax is near 0 and they'd get far more tax revenue from a lower tax rate right? I'd actually bet that this tax in particular not only doesn't raise money, but is a net-negative tax-wise as you're forcing people to spend their incomes on flights/hotels out of the country they otherwise wouldn't and they probably buy other things on their trip too.

From living in Chicago these forms of taxes seem so counter-productive. The pattern seems to be that a budget needs to be balanced, so they come up with a new consumption tax that conveniently assumes that the level of consumption stays the same with the new tax in place, but it never ever does.

It's so frustrating because once a tax gets extreme enough that almost no one pays it, lowering/removing it would benefit everyone including the government. It's one of those rare things that can be fixed instantly at no effort/cost with only positive results, yet it won't get done.

I think taxes are utterly broken in this country. For starters this one "supposedly" is a tax for a special group of people (That is, those that for whatever reason spend money in foreign countries) but the reality is that a large group of Argentinians do shop outside of the country.

Besides that there's a huge discussions since a lot of years ago, because the amount of money you have to earn in order to start paying taxes is rather low, and they don't get updated often. Add to that inflation and the end result is a lot of people paying a lot of taxes (And the government being very lazy catching up updating those taxes).

This is not a tax issue, but induced by existence of dual exchange rates. I'm guessing due to the limits, most phone resellers have to obtain their US dollars from the black market at higher rates, resulting in higher local pricing. Only those who are well-connected or buy dollars in low volumes can get adequate sums at the official rate, and even then, the arbitrage opportunity may be too good to miss out on, which results in prices close to black market rates, regardless.

People have been doing this since before dual exchange rates were (re-)introduced a year ago. There's a bit of everything, really.

- Some shops operate at the "blue dollar" value, out of necessity because they buy the products they sell at that rate, or trying to obtain a bigger profit from the things they bought at the official rate.

- Some shops operate at the official rate, but their products just get crazy high taxes (cars, for example).

- Some shops operate at the official rate and sell their products at that rate approximately. Some big tech manufacturers fall under this category, Apple products being the biggest exception as shown above (but there are many others). Fun fact: the inflation and the option to pay these products in no-interest instalments sometimes make products cheaper than in the US, accounting for the future devaluation of the peso.

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