ARGENTINA: The AFIP Closing & more – 24th Oct 2024

¡Buenos días from Louse Point! This is the Rorshok Argentina Update from the 24th of October twenty twenty-four. A quick summary of what's going down in Argentina.

If you’ve ever had to deal with Argentina’s tax agency, the AFIP, you might have dreamed about it disappearing. Well, this week, the government announced that your wish is coming true—but there’s a catch. A smaller entity called ARCA - the Collection and Customs Control Agency - will replace the AFIP. This change is part of the administration’s strategy to streamline public institutions. They intend to eliminate about 30% of the AFIP’s workforce—over 3,000 jobs.

The new agency will merge tax and customs services and be led by Florencia Misrahi, the current head of the AFIP. The government says this will reduce inefficiencies, save billions of pesos, and combat corruption. However, the specifics of the new agency’s operation and the legal basis for the dismissals remain unclear, sparking concerns over politically motivated firings.

The AFIP union has already strongly rejected the government’s plan. They said there’s no avoiding a strike unless the government backs down and they’re preparing for protests and other actions once more details emerge.

Speaking of strikes, transport unions have re-confirmed the strike for next Wednesday, the 30th of October. As we reported on previous episodes, it will affect subways, trains, aviation, taxi drivers, and truckers, among others. Buses will operate as usual since the bus drivers’ union chose not to join the strike.

Also, a heads up if you’re a frequent subway user: the Scalabrini Ortiz station on Line D of Buenos Aires’ subway will be closed for about three months. This is part of a project to upgrade the station’s infrastructure. The renovations will include waterproofing, new lighting, Braille signage, updated furniture, and repairs to the floors and walls. Other stations have already been upgraded under this initiative.

Something else to keep your eye on: the Central Bank is working with banks and credit card companies to roll out debit cards that operate in US dollars. Santiago Bausili, the bank’s chief, announced the initiative on social media, explaining that while the regulations are in place, they are still developing the system and security setup.

There’s no confirmed launch date yet, though reports suggest the cards could be available by the end of the year. This move aligns with President Milei’s plan to dollarize the economy, though he’s taking a more gradual approach than initially promised.

One Direction fans are still shocked by the news of Liam Payne’s death, and authorities are investigating whether it was accidental or the result of suicide. Just hours before his death, witnesses saw him in an intense argument with a woman in the lobby of the CasaSur hotel in Buenos Aires. They reported that Payne, who appeared agitated and energized, repeatedly offered the woman large sums of money, saying he could easily give her $20,000. The woman seemed uncomfortable, and the hotel staff tried to intervene. Later, Payne’s behavior escalated, leading hotel workers to call emergency services, concerned that he might harm himself.

There’s evidence of drug use found in his hotel room, and investigators are exploring how he obtained the ones he reportedly consumed before his fatal fall from the hotel balcony. Although they are still determining whether his death was accidental or a suicide, no evidence points to foul play.

On that note, a recent study by Universal Drugstore ranks Argentina as having the seventh-lowest suicide rate globally, with 6.6 deaths per 100,000 people. The suicide rate is higher among men, at almost twelve, compared to two for women. However, the research also highlights that Argentina has the ninth-lowest life expectancy, with an average lifespan of seventy-five years. The study also says that the country has the tenth-highest infant mortality rate globally and relatively low cancer-related death rates.

Let’s transition to business news, shall we? The government is moving forward with policies to reduce import tariffs and shorten companies’ wait to access the foreign exchange market from sixty days to thirty. While this aims to boost trade and prevent a loss of 500 billion pesos in tax revenue (about 400 million dollars at the parallel exchange rate), domestic industry leaders are worried. They fear that lowering tariffs and liberalizing trade will flood the market with cheaper imported goods, putting local businesses at risk, especially those already struggling in the recession.

Several textile companies are at risk, and some petrochemical factories have already closed. Additionally, the upcoming EU-Mercosur trade deal is causing anxiety among local manufacturers, who worry they won’t be able to compete with countries that don’t face export taxes.

In other news, the government announced it will privatize two 5G frequency slots previously held by state entities ARSAT and the National Communications Agency, ENACOM. They are opening them to private-sector bidding. The move is part of a push to deregulate the market and improve telecommunications services by encouraging competition and investment.

On top of the 5G frequency slots, President Milei’s administration is fast-tracking plans to privatize fifty-nine state-owned companies, with a team of around thirty officials assessing each firm’s future. Companies like the water provider AySA and the Banco de la Nación bank are on the list. The team is considering six potential outcomes for each firm, including full or partial privatization, partnerships, or closure. The government aims to reduce state involvement in key economic sectors, improve efficiency, and attract private investment. The privatization process is expected to take six to eight months.

Next up, the Columbia Journalism Review magazine published an article about President Milei’s attacks on the press. In a recent rally, he accused journalists of corruption and monopolizing public discourse. Milei has long said that the media is part of a privileged class, contributing to Argentina’s problems.

Check out the link in the show notes to read the full piece.

The president is also having beef with the Argentine Football Association, or AFA. Claudio Chiqui Tapia, the AFA president, is advocating for the current nonprofit structure of Argentine football, while the government is considering introducing private sports corporations.

This week, the government announced that the special tax benefits that football clubs enjoy will be eliminated by April twenty twenty-five. This affects tax rates on ticket and TV rights sales, as well as employer contributions to social security for football workers.

That said, government intervention in the AFA could lead to severe repercussions, including FIFA’s potential non-recognition of the AFA’s authority.

Nice segue to move into sports news. Valentina Pertegarini, born in Cordoba, made history by becoming the first woman to win a World Rally-Raid Championship title. She clinched the co-driver championship in the W2RC alongside her husband, Nicolás Cavigliasso. Overcoming skepticism in this male-dominated sport, her victory marks a significant milestone that she hopes will encourage more women to join motorsports.

Looking ahead, she and Cavigliasso are gearing up for the twenty twenty-five Dakar Rally.

Also related to motorsports, the Argentine driver Franco Colapinto had a challenging but rewarding weekend at the US Grand Prix, finishing 10th and securing his fifth point of the season. He benefited from race incidents, including Lewis Hamilton’s crash, and made impressive overtakes, most notably on Fernando Alonso. Colapinto was pleased with his performance and joked about potentially becoming a race engineer for his tire strategy call.

Before we wrap up, here’s a recommended read: The Miami Herald published an article about an incredible discovery by a film crew investigating the century-old mystery of the Helvecia tugboat, which disappeared in Argentina’s Lake Nahuel Huapi in nienteen oh six. In an astonishing turn of events, the crew actually found the missing ship. After years of fruitless searches, new insights from researchers, including the theory that a nineteen sixty earthquake might have shifted the wreck, led to this breakthrough. By using underwater robots, the team finally located the well-preserved vessel. While the cause of the ship’s sinking remains unknown, the find has been declared a heritage site. The documentary, The Search for Helvecia, is set to premiere later this year.

Link in the show notes!

Aaand that’s it for this week! Thank you for joining us!

Thanks for tuning into the Rorshok Argentina update. You can connect with us on social media as @Rorshok_ARG on Twitter and @rorshok__argentina on Instagram.

¡Nos vemos la próxima semana!