I have read about this before, but it still sounds totally crazy to me. There have been plenty of inefficient and corrupt governments which still have managed to impose police states. To me it seems like a cult of personality for the leader is a greater threat to your liberty than efficient bureaucracy.
I guess this boils down to philosophical differences in the role of government. One side believes that greater taxation leads to a larger role of government in society and results in the erosion of personal liberties. They are afraid that making filing taxes easier could continue this trend. I don't think this has anything to do with efficient bureaucracy and cult of personalities. The discussion on if government is ever able to be an efficient participant of all parts of society that it involves itself in is always up for debate. One fundamental reason for this belief is that government can not be the best solution to many of societies issues because the incentives on individuals in government, government bureaucracies and the public are so misaligned.