President Javier Milei has announced more measures focused on reducing the size of the state’s organizational structure in Argentina. In a recent release posted on the President’s Office’s X account, Milei revealed that he would eliminate the AFIP, the current tax enforcement agency, in favor of a similar institution with a smaller footprint.

The measure is part of Milei’s moves to eliminate redundant and inefficient institutions. The new agency to substitute AFIP will be called ARCA, which is being promoted as a less bureaucratic organization, as some of the employees from the first agency will keep their positions in this restructuring.

This new institution will reduce 45% of the superior authorities and 31% of the inferior ones, eliminating 35% of the current structure and generating significant savings. With these changes, the national treasury will save over 6.4 billion Argentine pesos ($6.5 million). The salary of the head of the new organization will also be reduced. Before, AFIP’s head earned 8 times the salary of a ministry. Now, these salaries will be equated.

In addition, 3,155 agents illegally integrated into AFIP will be removed from the new organization, alleging this is essential to “unravel the bureaucratic structure that has blocked the Argentine’s economic and commercial freedom.”

AFIP employees have resisted this measure, recently announcing a series of temporary strikes that could affect customs operations and international trade. The AFIP syndicate criticized Milei’s announcement, stating that the government was politically motivated to attack their work rights. “We repudiate a fiscal policy in favor of large economic groups and richer society sectors that will deepen the decrease in tax collection capacity instead of generating savings for pubic accounts,” it stressed.

Operation “Deep Chainsaw” had previously touched on other state institutions, including the national coin house. Before, Argentine Minister of De-Regulation and State Transformation Federico Sturzenegger hinted at new measures.

Read more: Deep Chainsaw: Milei’s Government Prepares New Measures to Curb Public Spending

Read more: ‘Deep Chainsaw’ Advances: Milei to Eliminate National Coin House

Writers’ take: Milei’s measures to reduce the state’s size are being celebrated by most, but will always find pushback from elements that have benefited from what he has called “the political jobs.” Nonetheless, Milei has to tread lightly, as the changes he wants Argentina to undergo will undoubtedly incentivize actions against his government, risking social unrest and destabilization.

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