Argentina Eliminates Mobile Phone Tariffs

The Argentine government has announced the complete elimination of import tariffs on mobile phones, following a reduction from 16% to 8% last May. This move affects a key component for phones, which has seen a significant price increase due to high demand from the AI industry. While the tariff elimination is expected to lower retail prices, industry officials clarify it may not be enough to make imported phones cheaper than those made locally. The government has therefore granted a simplified regime and the elimination of internal taxes, allowing for some price reduction. However, sources linked to local production indicate that the tariff cut does not compensate for the rising cost of memory chips. For phones produced in Tierra del Fuego, the price drop could be between 10% and 15%, resulting from a small shipments regime and the removal of internal taxes in effect since mid-last year. There are concerns that the local phone industry will decline as imported phones compete directly. A 9.5% internal tax and a 21% VAT still leave room for smuggling, experts warn. As a result, imported phones will become cheaper, with a potential price reduction of approximately 10%, according to industry leaders. Despite this, Argentina will remain at least 40% more expensive than Chile, Paraguay, or the US. Data from the Argentine Chamber of Electronics Factories (Afarte) shows that one in three phones sold in the country enters illegally. With the new tariff cut, the price reduction for imported phones could be between 20% and 25%.