- The measure coincides with an unusual boom in digital wallets among Argentine users.
- In this time the country has seen a need to bolster its collections to alleviate the severe financial crisis it is going through.
- The compulsory collection of tax debts was suspended due to the pandemic, but was resumed this month.
The Federal Administration of the Public Revenues of Argentina (AFIP), has not ruled out the possibility of seizing the funds of tax debtors being stored in virtual wallets.
The AFIP has given the green light for the collection of 24,000 million pesos in back taxes (worth approximately $226.5 million USD). The agency has managed to identify around 9,800 delinquent taxpayers throughout the country.
To ensure the viability of the measures, the Argentine government has included digital wallets in the list of assets considered appropriate for seizure by the tax body in order to collect unpaid debts.
Historically, asset seizures carried out by the AFIP were largely subject to deposits in bank accounts, movable and immovable property and credits, among other things.
"The development of electronic means of payment and its widespread use explains the agency's decision to include digital accounts in the list of assets that can be seized to collect debts," outlined official sources, as quoted by the local media Ambito.com. The tax body now has the power to request information related to the accounts of its clients from the banking entities and the digital platforms that manage the wallets.
It should be noted that this manner of operation was already being carried out by the AFIP since July 22nd, 2021. The collector imposed changes in the tax regulations, and incorporated digital wallets into the information that companies are obliged to provide when called upon.
Payment Facilities for Taxpayers
The government, through the AFIP, is seeking to improve tax controls, thereby preventing evasion and increasing collections by giving wallets similar treatment to that of traditional bank accounts.
However, the collector had suspended embargo measures on tax debt collections for 19 months, as it was considered inappropriate and immoral to execute such embargoes amidst the crisis of the global pandemic, and they were deemed to have undesirable economic effects.
Instead, the AFIP offered a series of tools to assist delinquent taxpayers in balancing their sheets. As of this month, fiscal executions were resumed due to the government’s obligation to increase collection.
On the Flipside
- The Argentine government has signed a preliminary agreement with the International Monetary Fund to refinance the debt of $44,000 million USD.
- The agreement includes the adoption of a controversial adjustment program that forces the administration of President Alberto Fernández to reduce its expenses and increase revenue with higher production and tax efficiency.
"The AFIP initiated the fiscal executions to the riskiest taxpayers and with greater amounts of debt", explained consulted sources. "The process that will be done gradually now contemplates the possibility of requesting embargoes to advance with fiscal executions on digital assets," they added. To regularize the debts, the collector installed the ‘Tax Relief Law’ and the ‘Permanent Payment Facility Plan.’
Why You Should Care
- Argentina is one of three Latin American countries to have most adopted the use of cryptocurrencies and digital wallets in the world.
- The country, currently governed by coalition, is facing a severe financial crisis due to an inefficient monetary policy being applied in recent years.
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