Photo via CasaRosada.gob.ar

Today is World Tourism Day — who knew? — and President Mauricio Macri took the opportunity to announce an initiative that should make Argentina just a tad more appealing for foreign tourists. Visitors from abroad will no longer have to pay VAT (IVA) on accommodation. Regardless of whether the visitor pays directly or through a third party (i.e. a travel agent) he or she will get an immediate refund on the value-added tax.

This comes on top of the VAT refunds that tourists can already claim for goods bought in the country.

As well as amazing landscapes and the best asado #Argentina has now added new benefits for foreign tourists: VAT refunds #IVAturismo

These new measures come shortly after the release of slightly worrying statistics by the INDEC statistics agency earlier this month, which recorded a dramatic drop in the number of tourists visiting Argentina (a decrease of 2.6 percent to 188,400 in July). The government now claims this initiative will act as an incentive for tourists (as if the steak and empanadas weren’t incentive enough…) and revitalize the country’s hospitality and tourism industry.

We’ve heard the concerns of the Tourism Sector and together we are building its future #IVAturismo #Argentina

While making the announcement today, Macri assured that Argentina still has “a lot to offer” in the area and that this strategy will help make Argentina become more competitive in the market, both in terms of other countries in Latin America and across the rest of the world. Argentina’s a bit late to the game with this one Chile, Uruguay, Perú, Colombia, and more, have already scrapped tourist VAT  but better late than never.

The new scheme will come into force once the Ministry of Finance endorses it in a process that could take more than two months.

Using a new hash tag, #IVAturismo, the Ministry of Tourism tweeted this morning that the numbers of tourists could rise by “almost 120,000” following this latest decision. Music to our ears. But on the flip side, while hotel rooms are cheaper for tourists, the fiscal cost of this shiny new scheme is estimated at US$600 million each year. Let’s hope that the arrival of all these tourists eager to spend their money really is just around the corner, or this could be another blow to the Argentinian economy.