Overview
- Congress has approved the Ley de Inocencia Fiscal, which overhauls tax enforcement and raises the thresholds at which infractions become criminal offenses.
- Juan Pazo, who recently stepped down after two years leading ARCA, defended the reform and labeled the previous model a “soviet regime” that presumed taxpayers were guilty.
- The law eliminates low-value reporting obligations on routine expenses, shifting resources away from mass data collection toward more targeted oversight.
- The reform introduces an optional simplified income tax filing in which ARCA prepopulates a return from invoices and deductible expenses, with personal consumption data anonymized and the user able to review and edit.
- Pazo said ARCA will bring cases to the judiciary only when financial movements lack economic sustenance, and he linked the changes to greater formalization, better access to credit, and a government-claimed tax burden reduction of more than 2.5 percentage points of GDP.