Argentina Declares War On Tax Dodgers - Again

BUENOS AIRES, Argentina - When government inspectors showed up recently at a fashionable mountain resort to stalk tax evaders, shopkeepers pelted them with eggs.

Another inspector - or "bloodhound," as they are nicknamed - was chased from a smart country house in Buenos Aires province by the knife-wielding owner, angry at the intrusion during a barbecue in his back garden.

Once again, Argentina's government has declared war on tax dodgers, this time arming inspectors with new laws to fine business owners and close down their shops and restaurants.

But in a country where evasion has long been considered a national sport - half of the population is believed to cheat on taxes - inspectors need more than just courage and laws.

"Evading your taxes is an art. You always have to be a step ahead," said Jose, the owner of a popular, cut-price restaurant in downtown Buenos Aires who spoke on condition that he not be fully identified.

"I have no problem outwitting inspectors. It's part of my living," he added with a smirk.

Carlos Silvani, the latest head of the tax bureau, says what is needed is a change in mentality.

"We're trying to change this culture where dodging taxes is equated with being cool and smart," Silvani said in a television interview.

In the past, the tax bureau has used all manner of persuasion trying to entice Argentines to pay up. For instance, street billboards urge the public to demand receipts for purchases so store owners cannot hide sales revenue.

Now, the bureau has set up a lottery whose winners are picked from people who send in sales receipts, the information from which is fed into computers to aid tax investigations. In December, a woman won 1 million pesos - a peso is worth $1 - when her restaurant bill was picked out.

The government also has set up a telephone hotline for people to report cases of tax evasion.

Under a law passed in January, retail businesses that do not issue sales receipts can be fined up to 30,000 pesos and risk being closed for up to a month.

Customers who fail to demand a receipt for goods worth more than 10 pesos can be fined between 20 and 2,500 pesos.

In the first 30 days of the new crackdown, the tax bureau said its inspectors visited 10,000 businesses and discovered 2,006 cases of evasion. As a result, 137 businesses were closed down and fined.

"Now, you don't know who you're dealing with, who's watching you or who's standing outside on the street," said Salvador Cabos, who runs a small store off Buenos Aires' main shopping street, Florida.

Bar owner Ricardo Llanes said the government is trying to create a nation of snitches by encouraging people to turn in others.

Traditionally, the simplest way to evade taxes was to buy and sell in cash, keep few records, stash profits under the mattress or overseas, and count on government incompetence in pursuing cheaters.

Now, businesses are being required to install special cash-register software that will store all records of payments.

The "black boxes" - which the government says must be installed in cash tills nationwide by April 1998 - are impossible to tamper with, officials say. Inspectors can demand them at any time to update their records.

Jose scoffs at the idea and nods at the staircase leading to his restaurant's basement, licking his finger to count a thick wad of peso bills.

"I have two identical cash tills - the same make and the same serial number," he said. "I keep one in the restaurant to make everything look legal. The other is downstairs."

During the day he records purchases on the register upstairs in case tax inspectors drop by. At night, he throws away the receipts and the register's ribbon and makes new records downstairs.