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.