Argentine president proposes amnesty for tax dodgers

Argentine President Mauricio Macri, who has been swept up in the Panama Papers controversy over offshore assets, announced plans Friday to grant amnesty to those who repatriate undeclared funds from overseas.

The conservative president, who has launched sweeping pro-business reforms since taking office in December, said the country needed Argentines to invest at home to boost the sputtering economy.

"Argentines have billions of pesos overseas because they didn't trust in the state. We need to tell them to join us, to be part of our new era. We invite them to wipe the fiscal slate clean," said Macri.

The president himself acknowledged he has $1.25 million in an account in the Bahamas in a mandatory asset declaration published Thursday, which showed his fortune had doubled from the year before, to 110 million pesos ($7.8 million).

The son of a wealthy business magnate and former mayor of Buenos Aires, Macri was caught up in the controversy unleashed last month when millions of documents were leaked from Panamanian law firm Mossack Fonseca, showing the offshore financial dealings of the rich, powerful and criminal.

The episode revealed Macri was on the board of directors of a company listed in the Bahamas and vice president of another in Panama, both linked to his family.

Macri, who had not declared the firms in his mandatory asset declarations, denied wrongdoing.

The president said Friday he would send a bill to Congress offering three options for Argentines with undeclared assets overseas: pay a tax, convert the funds into Argentine bonds or put them in long-term investments at home.

The bill sets a January 1 deadline for the amnesty. Until then, the tax rate on undeclared funds will be five percent for up to $56,000 and 10 percent for larger amounts.

After January 1, the rate will rise to 15 percent. Finance Minister Alfonso Prat-Gay said those who fail to comply by that date will also face prosecution.

The government did not say how much money it expected to collect with the plan.

The Tax Justice Network, a watchdog group, estimates Argentines have $400 billion overseas.

Argentina, Latin America's third-largest economy, has a history of hyperinflation, crises and runs on the bank that have made many people wary of keeping their savings in the domestic banking system.