Two new studies by the United Nations Economic Commission for Latin America and the Caribbean (CEPAL) show that tax collection by Latin American governments is not only below that of the 30 most industrialized nations of the world, but that it is also lower than that of southeast Asia and Africa.
Many will probably say: "That's nothing new! Don't you know that tax evasion has been one of the favorite sports in the region for centuries? Haven't you ever wondered where all the money came from to buy those luxury apartment towers in Miami?"
High taxes and evasion eroding economic growth in Latin America and the Caribbean.
New IDB study says governments must simplify tax systems and reduce evasion
Complex tax systems and widespread evasion are distorting investment decisions by companies in Latin America and the Caribbean, reducing the efficiency of markets and preventing governments from investing in infrastructure, education and other key public goods.
In the first 10 months of 2011, tax revenues reached $4.723 million, 18.4% higher than in the same period in 2010.
The increase in revenue is due in part to a significant increase in the collection of Income Tax (32.9%).
"Pablo Urrutia, analyst from the Association for Research and Social Studies (ASIES in Spanish), thought that in addition to these figures and percentages, it would be necessary to look at other factors, such as prices and inflation. 'Even if more money has been collected, if you do not have better spending there is no real benefit, despite the fact that economic growth has increased’”, reports Siglo21.com.gt.
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