November 22, 2016 / 2:52 PM / a year ago

UPDATE 1-Deposits in first stage of Argentine tax amnesty seen about $7 bln

(Adds economic context in second paragraph)

BUENOS AIRES, Nov 22 (Reuters) - Close to $7 billion has been deposited into accounts that were opened last month as part of an Argentine tax amnesty plan meant to help jumpstart the economy, government news site Telam reported on Tuesday.

Latin America’s No. 3 economy is in recession, and investment has been slow to pick up under President Mauricio Macri, a free-market proponent elected last year on promises of stimulating growth, cutting inflation and abolishing currency controls.

The tax amnesty deposits “will be very close to $7 billion in cash,” Telam quoted Finance Minister Alfonso Prat-Gay as saying during a meeting with local industrialists in Buenos Aires.

The government plans to announce the official tally later on Tuesday.

One banker had said the cash phase would bode well for the broader amnesty if $5 billion to $6 billion is declared. The plan allows participants to pay a fee and avoid prosecution for tax evasion.

Some 160,000 Argentines opened special bank accounts and had until the end of the day on Monday to deposit cash that they had stashed in safety deposit boxes and under mattresses.

Given Argentina’s history of cyclical economic crises and currency devaluations, people there have tended to keep their money out of the banking system.

The focus will now shift to efforts to declare and tax an estimated $400 billion in assets held abroad, a process that will influence how much debt Macri’s government needs next year and when Argentina’s economy emerges from recession. (Reporting by Hugh Bronstein; Editing by Lisa Von Ahn)

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