In a high-profile investigation spearheaded by Argentina’s revamped tax authority, Pablo Otero, the controversial owner of Tabacalera Sarandí, faces a staggering $1.3 billion claim for unpaid taxes. This bold move by the Dirección General Impositiva (DGI), now operating under the new Agencia de Recaudación y Control Aduanero (ARCA), reflects an aggressive stance on fiscal compliance within the tobacco industry.
A Shocking Tax Evasion Case
Between March 2018 and mid-2024, Tabacalera Sarandí allegedly evaded payment of Internal Revenue taxes, amassing a debt of approximately $200 billion ARS. According to government estimates, this translates to about $1.3 billion USD at average exchange rates during that period. The company is accused of leveraging legal injunctions to avoid paying mandatory taxes, including a 73% excise tax on cigarette sales.
Despite ongoing judicial processes, authorities remain determined to hold the company accountable. “The key is to expose these crimes and ensure compliance,” said a government insider familiar with the case.
Reforms Under Andrés Vázquez
The appointment of Andrés Vázquez as the head of the DGI on October 26 brought a wave of changes aimed at strengthening enforcement against tax evasion. Vázquez wasted no time in restructuring key positions within the organization, replacing officials with experienced personnel, including Marcelo Lafont and Claudio Castagnola, to tighten control over large contributors.
Vázquez’s technical expertise and international training, including courses with the DEA and U.S. Treasury, position him as a formidable force in the fight against fiscal noncompliance.
Tabacalera Sarandí’s Market Power
Known for its brand Red Point, Tabacalera Sarandí dominates nearly 40% of the Argentine cigarette market, a sharp rise from 5% a decade ago. Critics argue that its alleged tax evasion allowed it to sell products at lower prices, gaining an unfair competitive advantage over rivals.
With monthly sales exceeding 40 million cigarette packs, the company has become a challenging target for regulators. Officials claim that some sales are under-declared, with prices often double those reported to tax authorities.
Judicial Battles and Economic Impacts
While Tabacalera Sarandí has contested the constitutionality of Internal Revenue taxes in court, ARCA remains resolute in its investigation. The Supreme Court has yet to deliver a final ruling on the matter, leaving the company in a precarious position.
In a partial concession, the company disclosed $60 million USD under an amnesty program led by the Minister of Economy. While this helps reduce its liabilities, the total debt continues to grow as investigations expand.
Modernizing Tax Compliance
ARCA has revamped inspection processes to improve oversight of the tobacco industry. These include:
- Physical and Digital Stamp Controls: Monitoring tax stamps affixed to cigarette packs, ensuring both physical and digital components meet new security standards.
- Sales Channel Audits: Identifying potential falsifications and calculating tax omissions based on unreported revenues.
The era of indiscipline is over, government sources stated, emphasizing the focus on transparency and accountability.
Conclusion
The probe into Tabacalera Sarandí exemplifies Argentina’s broader effort to tackle systemic tax evasion and promote fair market practices. As the government intensifies its scrutiny, this case could set a precedent for holding large corporations accountable for fiscal compliance.
Stay tuned for updates on this unfolding story as the DGI continues its pursuit of justice.
