Can you please enlighten us, enumerating some of the methods used by them, which makes them the best in the business.
SO many to list and mention but I'll just list the biggest ones:
- Many employers and companies pay employees under the table as to avoid paying taxes and benefits. I'm not sure what % of the economy is in "black" but it's substantial. Much higher than other countries.
- Many companies that should be charging IVA (21%) including even lawyers, realtors, accountants, escribanos, etc. will allow you to avoid paying this IVA tax if they don't have to provide an official receipt as it benefits them as well so they don't have to declare the income and pay taxes
- Many wealthy locals have tons of assets abroad that are undeclared. Argentina has a wealth tax on WORLDWIDE assets.
- Many individuals that own their own companies don't declare any of the income. They just work for cash and don't declare any income or simply set up as Monotributu status and declare a fraction of actual earnings.
- People when selling or buying real estate use FAKE prices as to avoid both the stamp tax, property tax and then it causes them to pay less property taxes forever (or until they sell the property).
- Many locals that rent out their properties don't declare any income on their properties and therefore don't pay any income taxes on it.
- Many locals don't pay any property taxes on their properties. And there really isn't any penalties for not paying. The only people forced to pay annual property taxes are non-resident foreigners as they have to apply for a permit to sell when they sell their properties so they will pay their property taxes one way or another. Not so for locals. (In first world countries you get a property tax bill in the mail each year and failure to pay property tax results in severe penalties or possibly losing your property to the government).
Ceviche, I just meant that a very large percentage of the economy is in the "black" in Argentina. Are you trying to imply this isn't the case?? If so, it would be the first time I've actually heard of someone trying to argue that tax evasion or the "black economy" one way or another isn't a problem in Argentina because it certainly is.
Locals don't really put large amounts of money in their bank accounts as to not attract attention (plus they don't trust the banks). But much of the economy is in cash so the government can't track spending even if they wanted to. In most first world countries, it's becoming almost a cashless society with people mostly using debit and credit cards vs. having cash. I'm even starting to see restaurants that don't even accept cash which is interesting).
I'm not saying I blame locals. I'm just calling it as I see them. In the USA and most first world countries it's almost impossible to evade taxes like they do in Argentina. Plus the penalties are jail time. So no joke. In Argentina many people evade taxes because they can and there is no severe penalties. Not so in most first world countries around the world.
In first world countries, it's possible to legally lower or at least defer some taxes but it's very very difficult to evade taxes like you see in Argentina. That's my main point.
Taxes are tough and NO ONE likes paying taxes. As others mentioned, most locals don't like paying taxes because they assume it will just end up in the pockets of corrupt politicians (which is often the case - just like at CFK). But that kind of mentality is really horrible because you can't ever get any stability with that type of thinking. And you get institutionalized tax evasion which is what you see in Argentina today.
In the USA, I pay a fortune in taxes and I do hate it. But at least everything works here. Police, fire fighters, streets, parks, highways are mostly all really fantastic. Our system and society works because of this. People can argue all they want about all the problems that the USA has. But for the most part, things work really really well here due to most people paying their fair share of taxes (or at least what the law calls for).
