South American state to dissolve tax authority

Argentina’s government has announced plans to dissolve the country’s tax bureau and replace it with a new “simplified” agency. Staffing will be reduced by just over a third in the process of the restructuring.

According to a statement released by the government on Monday, the Federal Administration of Public Income (AFIP) will be renamed as the Customs Revenue and Control Agency. Over 3,000 positions within the dissolved agency will be eliminated in an effort to reduce “inefficient structures.”

Around 45% of the senior-level positions will be eliminated, while lower-level staffing will be reduced by 31%. This is projected to generate annual savings of around 6.4 billion pesos (around $6.6 million), according to government estimates.

“The step is essential to dismantle the unnecessary bureaucracy that has hindered the economic and commercial freedom of Argentines,” the statement reads, highlighting that the new agency will function as “a more simplified, more efficient, less costly and less bureaucratic structure.”

The statement referred to the employment of 3,155 workers as being “irregular” and raised questions about the legality of their hiring under former President Alberto Fernandez, whose team is often the target of criticism by the current government headed by Javier Milei.

“The Argentina of fiscal voracity is over. What belongs to every Argentine is theirs and no one else’s. No state bureaucrat should have the power to tell them what to do with their property,” Presidential spokesman Manuel Adorni said, commenting on the restructuring, as cited by the Buenos Aires Times.

Inaugurated in December 2023, Milei, a former TV pundit, has pledged to cut 70,000 jobs from the state sector and terminate over 200,000 social welfare programs as part of his shock therapy reforms aimed at stabilizing the country’s ailing economy. The budget-slashing measures include eliminating or downgrading a number of government ministries and state agencies.

The union representing the employees of the dismantled bureau announced plans for a strike in response to the announcement. “We are going to mobilize and we will take more measures as soon as we know the details. The most worrying thing is the 3,100 jobs of our colleagues,” union chief Pablo Flores told the Buenos Aires Times.

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