CIAT’s Executive Secretary Claudino Pita attended the seminar “Taxation, Equality and Evasion in Latin America: Challenges and Trends”, organized by ECLAC and held in the framework of the project “Fiscal policies towards greater equality: building a fiscal covenant”, which is developed jointly with German agency GTZ.

Mr. Pita gave his opinion on the issue of “Recent trends in taxation in Latin America and their importance to equality”, exposed by Juan Carlos Gómez Sabaini, Project Consultant.

Latin American experts on the matter, representatives of international bodies such as IDB, GTZ, OECD, ECLAC and Latin American Tax Administrations’ authorities gathered at the Conference Room Raúl Prebisch in the branch of the Economic Commission for Latin America and the Caribbean (ECLAC) in Santiago de Chile between November 24 and 25.

The seminar was aimed at promoting a forum to discuss the fiscal policies of Latin American countries, analyzing taxation trends and challenges in order to achieve greater equality and a better income distribution and thus facilitate the development in the region.

The meeting concluded that greater direct tax collection, especially the personal income tax, would improve the distribution impact of the fiscal policy, in light that Latin American countries’ taxation structure has mostly regressive effects, contributing to a disparity that characterizes this region as one with the worst income distribution worldwide. Among the main causes are the prevalence of consumption taxes, the nearly inexistent participation of property taxation, the low relative importance of income taxes, the favorable treatment given to income from capital and capital gains in the income tax and a greater relative burden on employment income.

It was also concluded that there are factors that should be taken into account, such as the relevant paper of the tax administration, which has now significantly improved its management capacity in the countries of the region; the exhaustion of the VAT as the main tax collection cornerstone, which has already reached a top in many countries; the need of governments to resort to new fiscal resources to fight poverty and speed up growth; and a considerable dependency on income revenues (resulting from the exploitation of primary goods such as oil, copper, gas and agricultural products, etc.) which generate uncertainty, since they may become not very profitable.