• The measure coincides with an unusual boom in digital wallets among Argentinian users.
• In this period, the country felt the need to strengthen its collections to alleviate the serious financial crisis it is going through.
• Mandatory collection of tax debts was suspended due to the pandemic, but resumed this month.

Argentina’s Federal Public Revenue Administration (AFIP) has not ruled out the possibility of seizing tax debtor funds stored in virtual wallets.

AFIP has given the go-ahead to collect 24,000 million pesos in back taxes (worth about US$226.5 million). The agency managed to identify approximately 9,800 delinquent taxpayers nationwide.

To ensure the viability of the measures, the Argentine government has included digital wallets in the list of assets considered eligible for seizure by the tax authorities in order to collect unpaid debts.

Historically, asset seizures carried out by AFIP involved, among other things, deposits in bank accounts, movable and immovable property and loans.

“The development of electronic means of payment and their generalization explain the agency’s decision to include digital accounts in the list of assets that can be seized to recover debts”, underlined official sources, quoted by the local media Ambito .com. The tax administration now has the power to request information relating to its customers’ accounts from the banking entities and digital platforms that manage the portfolios.

It should be noted that this mode of operation had already been practiced by the AFIP since July 22, 2021. The collector imposed changes in tax regulations, and integrated digital wallets into the information that companies are required to provide when they are solicited.

Payment facilities for taxpayers

The government, through the AFIP, seeks to improve tax controls, thereby preventing tax evasion and increasing collections by giving wallets a treatment similar to that of traditional bank accounts.

However, the tax collector had suspended tax debt collection embargo measures for 19 months, as it was deemed inappropriate and immoral to execute such embargoes amid the global pandemic crisis, and they were deemed to have adverse economic effects.

Instead, AFIP offered a series of tools to help defaulting taxpayers balance their sheets. Starting this month, tax executions have resumed due to the government’s obligation to increase collection.

on the reverse

• The Argentinian government has signed a preliminary agreement with the International Monetary Fund to refinance the debt of 44,000 million US dollars.
• The deal includes passing a controversial adjustment program that forces President Alberto Fernández’s administration to cut spending and boost revenue through higher production and tax efficiency.

“AFIP initiated tax executions for the riskiest and most indebted taxpayers,” explained the sources consulted. “The process that will be phased in now considers the possibility of requesting embargoes to move forward with tax executions on digital assets,” they added. To regularize the debts, the tax collector installed the “tax relief law” and the “permanent payment facility plan”.

Why You Should Care

• Argentina is one of the three Latin American countries that have most adopted the use of cryptocurrencies and digital wallets in the world.
• The country, currently governed by a coalition, is facing a serious financial crisis due to an ineffective monetary policy applied in recent years.

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