Argentina's Tax Man Toughens His Collection Tactics

Tax authorities in Greece, where evasion is a national sport, may want to borrow a page from Argentina’s playbook. South America’s second-largest economy managed to boost federal tax collection from 16.5 percent of gross domestic product in 2002 to 31.8 percent in 2012, according to data from the Center for the Implementation of Public Policies Promoting Equity and Growth, a research center in Buenos Aires. That puts Argentina on a par with nations such as the U.S. and the U.K.—an impressive achievement for a country with a still-thriving underground economy. About one-third of Argentina’s workers are paid under the table.

So perhaps it’s fitting that Ricardo Echegaray, the head of the Federal Administration of Public Revenue (AFIP), Argentina’s version of the IRS, enjoys the distinction of being the country’s highest-paid functionary. His 2011 take-home salary of 1.2 million pesos (about $241,000) was about four times that of President Cristina Fernández de Kirchner. Sitting in his office in a 1930s-era building overlooking the Plaza de Mayo, a Buenos Aires landmark, Echegaray is happy to expound on the central role of his agency. “Argentina is not taking foreign loans these days,” says the onetime naval officer. “As such, there would be no state policies without tax collection. The entire Argentine government requires an agency like the AFIP to act.”