The Argentine government has implemented a new financial income tax retroactively, with the effective date starting from January 2018, according to a decree published Dec. 27 in the government's official gazette.

The revised tax rules expand the number of financial income sources that are subject to taxation. The new rule sets a 5% tax on financial gains from individuals produced by local currency investments like fixed-term deposits, mutual funds and bonds, as well as a 15% rate on those generated from dollar denominated and inflation-adjusted instruments.

Financial gains from digital currencies or cryptocurrencies, such as Bitcoin, are also now taxed under the new rules.

The tax still only applies to gains exceeding 66,917.91 Argentine pesos for 2018; and that figure will rise to 104,735.77 pesos in 2019, according to a report from Clarín.

Claudio Zuchovicki, executive director at domestic stock market operator BYMA, regarded the government's measure as poorly timed given the generally tepid performance of financial assets during 2018. Many such investments failed to provide returns that outpaced Argentina's inflation rate, which is estimated to hit 47% by year-end.

Argentine national tax agency AFIP is reportedly expected to release a final regulation in January 2019. The publication noted that the only tax-exempt investments remaining in Argentina are stock trading and interest on saving accounts.

As of Dec. 26, US$1 was equivalent to 38.46 Argentine pesos.