In Argentina, excessively high tax rates have made it difficult for citizens to pay them on time. To provide some flexibility, the government offers “tax moratoriums”—10-year windows where taxpayers can catch-up on their dues with no penalty. Originally a useful tool, the moratorium has evolved into the preferred means of paying taxes in the country that is constantly extended, with over half of all taxpayers opting in.
When the moratorium was extended once again due to the COVID-19 pandemic, Asociacion Argentina de Contribuyentes (AAC), an Atlas Network partner, noticed that the proposition didn’t do anything to address the underlying problem. While the majority of taxpayers would benefit from this proposal, it wouldn’t accomplish anything for the minority of citizens who pay their taxes on time. “That's how crazy our tax system is,” said AAC’s Jonas Torrico. “And to give a reward to those who paid their dues on time, we proposed the Compliant Taxpayer Reward bill.” It is with this backdrop that the AAC team launched their Compliant Taxpayer Project to reward responsible taxpayers and incentivize others.
AAC drafted a bill that looked to reward and recognize compliant taxpayers and presented it to the “Junto por el Cambio” party (Together for Change). The bill quickly resonated with elected officials and deputies, with 129 signing on.
The bill passed the Senate in August and became law. Now, compliant taxpayers are subject to receive a 50% tax break, a move that AAC hopes will instill a mindset of timely taxpaying and reduced tax burden for millions of Argentines. “With this law, we were able to leave hundreds of millions of dollars in the hands of taxpayers, something that has rarely happened in Argentina,” concluded Torrico. “For this, it was necessary to create consensus as has rarely been achieved, an experience that we hope to repeat in the future.”
Atlas Network supported the this project with a grant.