More than Revenue: Main Challenges for Taxation in Latin America and the Caribbean

55 Pages Posted: 26 Jan 2013

Date Written: September 2012

Abstract

This paper aims to provide an overview of the current state of taxation in the Latin America and Caribbean (LAC) region, and its main reform needs and options. It previews the findings of recent studies prepared or commissioned by the Inter-American Development Bank (IDB) for its forthcoming flagship publication More than Revenue: Taxation as a Development Tool in the -Development in the Americas- series. Reflecting fiscal consolidation imperatives, the main objective of fiscal policies in the region in recent decades has been revenue mobilization, often at the expense of efficiency and equity objectives. This paper analyzes the region's taxation in regard to revenue adequacy, efficiency, vertical and horizontal equity, ease of administration and compliance, and degree of fiscal decentralization, concluding that there is significant scope for reforms that would result in simultaneous improvement on several of these fronts. Although the paper does not provide a specific blueprint for reforms, which would need to be designed on a country-by-country basis, it identifies directions for reform that are relevant for most of the region.

JEL Classification: H20, H21, H22, H23, H24, H25, H26

Suggested Citation

Ter-Minassian, Teresa, More than Revenue: Main Challenges for Taxation in Latin America and the Caribbean (September 2012). IDB Working Paper No. IDB-PB-175, Available at SSRN: https://ssrn.com/abstract=2207234 or http://dx.doi.org/10.2139/ssrn.2207234

Teresa Ter-Minassian (Contact Author)

affiliation not provided to SSRN ( email )

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