The Federal Administration of Public Revenue or Administración Federal de Ingresos Públicos (AFIP), Argentina’s revenue collection body, is now targeting digital assets held by tax evaders in the country.
According to a report Per iProUP, a local news outlet, AFIP has seized 1,269 digital asset wallets linked to tax offenders since February 2021 with the backing of courts across the country. This method enabled the AFIP to recover more than $800 million in accrued debts from delinquent taxpayers during the first quarter of this year, the report noted.
The tax regulator revealed that it identifies wallets through information shared by Virtual Asset Service Providers (VASPs), as required by laws governing all entities in the financial industry. The law requires financial entities to maintain verified KYC information, as well as detailed records of users’ income, expenses, and monthly account balances.
While collecting data, AFIP has not publicly suggests to plans to crack down on the digital assets of tax evaders in May this year. Previously, it largely targeted the seizure of bank accounts, cash or other types of assets to cover tax payment discrepancies.
The move is also a resumption of AFIP’s relentless crackdown on tax evaders, which was suspended for 19 months during the COVID-19 pandemic lockdown to ease financial pressures on citizens.
Meanwhile, the tax body estimates Argentines have more than $360 billion in undeclared taxes, with a significant portion of that figure in foreign banks and investments outside their jurisdiction.
Digital currency adoption on the rise in Argentina
AFIP’s decision comes as Argentines flock to digital assets in droves. The South American country is struggling with inflation and currency devaluation – Argentina peso, leading many to look for alternatives to protect their wealth, according to a recent report by Reuters.
Contrary to the widespread adoption of digital currencies by citizens, government agencies are divided on how to handle the industry. While lawmakers have proposed regulating the use of digital currencies for paying wages, the central bank has warned of the risks such a move could pose.
Argentina is also facing external pressure from the International Monetary Fund (IMF) to discourage digital currency adoption. The IMF imposed conditions on the country as part of its bailout deal.
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