Argentina Overhauls Tax Collection Agency in Bold Cost-Cutting Move

The Argentine government has taken a decisive step to streamline its tax collection system. On Monday, officials announced the dissolution of the Federal Administration of Public Revenue (AFIP). This long-standing institution will be replaced by a new entity called the Revenue and Customs Control Agency.

The government spokesperson, Manuel Adorni, shared this news during a press conference at the Casa Rosada. He explained that the new agency would have a simplified structure. This change is part of the government’s broader efforts to reduce public spending and increase efficiency.

The restructuring will lead to significant staff reductions. Adorni revealed that 45% of senior positions, which he referred to as “political caste,” will be cut. Additionally, 31% of lower-ranking positions will be eliminated. In total, 34% of public positions within the agency will be removed.

Furthermore, about 3,100 employees who joined during the previous administration will be reassigned or placed on standby. These staff changes are expected to result in substantial savings. Adorni estimated an annual budget reduction of 6.4 billion pesos ($6.5 million).

The reorganization also targets high-level compensation. Previously, the AFIP head and directors received significant monthly bonuses. These “hierarchical accounts” amounted to about 30,400 and 17,200 dollars respectively. Under the new structure, these officials will earn salaries comparable to ministers and state secretaries.

Argentina Overhauls Tax Collection Agency in Bold Cost-Cutting Move

Adorni also announced new appointments for key positions within the agency. New heads will lead the General Tax Directorate and the General Customs Directorate. These departments will now operate under the newly formed Revenue and Customs Control Agency.

This bold move by the Argentine government aims to create a more efficient and cost-effective tax collection system. It reflects a broader strategy to streamline public administration and reduce government expenditure. The impact of these changes on tax collection and public service delivery remains to be seen.