scholarly journals How do the Tax Burden and the Fiscal Space in Latin America look like? Evidence through Laffer Curves

2020 ◽  
Author(s):  
Ignacio Lozano-Espitia ◽  
Fernando Arias-Rodríguez
Keyword(s):  
Latin America ◽  
Tax Burden ◽  
Fiscal Space ◽  
Laffer Curves

Public infrastructure investment and fiscal sustainability in Latin America: incompatible goals?

2014 ◽  
Vol 41 (1) ◽  
pp. 29-50 ◽  
Author(s):  
Luis Carranza ◽  
Christian Daude ◽  
Angel Melguizo
Keyword(s):  
Developing Countries ◽  
Latin America ◽  
Latin American ◽  
Public Investment ◽  
Fiscal Rules ◽  
Infrastructure Investment ◽  
Fiscal Consolidation ◽  
Public Infrastructure ◽  
Content Type ◽  
Fiscal Space

Purpose – This paper aims to understand the relationship in developing countries between fiscal consolidation and public investment – a flexible part of the budget that is easier to cut during consolidation effort, but with potentially negative growth effects. Analyzing in detail the case of Peru, the paper explores alternative fiscal rules and frameworks that might help create fiscal space for infrastructure investment. Design/methodology/approach – The paper analyses trends in public and total infrastructure investment in six large Latin American economies, in the light of fiscal developments since the early 1980s. In particular, the paper explores the association between fiscal consolidations (improvements in the structural fiscal balance) and public infrastructure investment rates. In the second part, the paper analyzes recent changes in the fiscal framework of Peru and shows how they were conductive in creating additional fiscal space. Findings – The authors argue that post-crisis fiscal frameworks, notably fiscal rules that are increasingly popular in the region, should not only consolidate the recent progress towards debt sustainability, but also create the fiscal space to close these infrastructure gaps. These points are illustrated in a detailed account of recent developments in the fiscal framework and public investment in the Peruvian case. Originality/value – The paper contributes new evidence to the literature on fiscal consolidation and the composition of government expenditures. While the literature based on evidence from the 1990s has argued that fiscal consolidation plans in Latin America have almost always led to a significant reduction in public infrastructure investment, the paper finds less clear cut evidence when extending the analysis backwards (1980s) and forwards (2000s). The example of the case of Peru is used to explore fiscal institutions and rules that might be useful for other developing countries that face important infrastructure gaps.

Better pensions, better jobs: status and alternatives toward universal pension coverage in Latin America and the Caribbean

2015 ◽  
Vol 16 (2) ◽  
pp. 121-143 ◽  
Author(s):  
ANGEL MELGUIZO ◽  
MARIANO BOSCH ◽  
CARMEN PAGES
Keyword(s):  
Latin America ◽  
Labor Markets ◽  
Productivity Growth ◽  
Universal Coverage ◽  
Economic Changes ◽  
Current State ◽  
Formal Employment ◽  
The Caribbean ◽  
Pension Coverage ◽  
Fiscal Space

AbstractThis article offers an overview of the current state of labor markets and pension coverage in a wide sample of Latin America and the Caribbean countries, and proposes a series of possible avenues toward universal coverage, not only as an instrument to fight poverty during old age, but also as part of an agenda for increasing formal employment and productivity growth. We conclude that despite perspectives of low economic growth and reduced fiscal space, the region is going through intense demographic and socio-economic changes, which increase the demand for better jobs and provide a real opportunity for initiating the bold reforms in pensions, labor, and taxes needed to achieve universal coverage.

scholarly journals Fiscal Space for Health in Latin America and the Caribbean

2020 ◽  
Keyword(s):  
Latin America ◽  
Health System ◽  
Public Expenditure ◽  
Critical Time ◽  
Well Being ◽  
Reform Process ◽  
Health Strategy ◽  
The Caribbean ◽  
Fiscal Space ◽  
Universal Health

Countries that have made the most progress toward universal coverage have public expenditures in health equivalent to at least 6% of their gross domestic product (GDP), which is the percentage established in PAHO’s universal health strategy as the benchmark for the countries. However, while higher expenditure is a prerequisite, it is not enough to combat inequities and advance toward universal health. In addition to greater resources, the quality of the expenditure must be improved, reducing health system inefficiencies. Moreover, public expenditure in health should be sustainably increased in a fiscally responsible manner. The concept of fiscal space for health refers to the ability of governments to provide additional budgetary resources for the health system without affecting the financial position of the public sector or supplanting other socially necessary expenditures. Any analysis of fiscal space, therefore, will attempt to identify the prospects for increasing health expenditure in the short and medium term to address a series of clearly established health needs. These efforts are under way at a critical time in the Region of the Americas, particularly in the countries of Latin America and the Caribbean, which are engaged in a singular health system reform process. For the first time in history, these countries have formalized their intention of increasing public expenditure in health, putting themselves firmly on the path to real and effective access to health care through the universal health strategy. Without achieving basic well-being at this level, it will be impossible to improve social cohesion and social development in the countries of the Region. This publication brings together and summarizes PAHO’s studies on fiscal space for universal health in the Americas and draws on the contributions of the regional forum held in Washington, D.C. on 7-8 December 2015. With this publication, whose target audience is the technical personnel responsible for policy development, decision-makers, and authorities, PAHO hopes to contribute to the analysis and discussion of health financing policies on the path toward universal health.

scholarly journals How do the Tax Burden and the Fiscal Space in Latin America look like? Evidence through Laffer Curves

2021 ◽  
pp. 1-26
Author(s):  
Ignacio Lozano-Espitia ◽  
Fernando Arias-Rodríguez
Keyword(s):  
Latin American ◽  
Tax Rates ◽  
National Accounts ◽  
Effective Tax Rates ◽  
Fiscal Space ◽  
Factor Returns ◽  
Latin American Countries ◽  
Neoclassical Growth ◽  
Laffer Curves

How much fiscal space do Latin American countries have to increase their tax burdens in the long term? This paper provides an answer through Laffer curves estimates for taxes on labor, capital, and consumption for the six largest emerging economies of the region: Argentina, Brazil, Chile, Colombia, Mexico, and Peru. Estimates are made using a neoclassical growth model with second-generation human capital and employing data from the national accounts system for the period from 1994 to 2017. Our findings allow us to compare the recent effective tax rates on factor returns against those which would maximize the government's revenues, and therefore to derive the potential tax-related fiscal space. Results suggest that joint fiscal space on labor and capital taxes would reach 6.5% of GDP for the region, on average, and that there are important differences among the countries.

The Roots of Brazil's Heavy Taxation

2015 ◽  
Vol 47 (4) ◽  
pp. 749-779 ◽  
Author(s):  
GABRIEL ONDETTI
Keyword(s):  
Latin America ◽  
Social Class ◽  
Public Sector ◽  
Tax Burden ◽  
Political Actors ◽  
The Social ◽  
Support For Democracy ◽  
Over Time

AbstractLatin America is widely known as a low-tax region, but Brazil defies that description with a tax burden almost double the regional average. Though longstanding, Brazil’s position atop the tax burden ranking is not a historical constant. As recently as the early 1950s three other countries, Argentina, Chile and Uruguay, had similar or even heavier burdens. However, by the early 1980s Brazil had emerged as the most heavily taxed country in Latin America, and subsequent decades reinforced that status. This article seeks to uncover the roots of Brazil’s heavy taxation by examining the process through which it rose to the top of the regional ranking and managed to stay there. It emphasises two variables, the social class bases of public sector growth and the degree of support for democracy among key political actors. Despite changing over time, these variables have consistently interacted in ways that favour rising taxation.

COMPETITIVENESS OF THE TAX SYSTEM IN THE CONTEXT OF EXPANDING THE FISCAL SPACE OF UKRAINE

2020 ◽  
Vol 2020 (10) ◽  
pp. 34-53
Author(s):  
Inna LUNINA ◽  
◽  
Olena BILOUSOVA ◽  
Nataliya FROLOVA ◽  
◽  
...  
Keyword(s):  
Open Economy ◽  
Shadow Economy ◽  
Tax Burden ◽  
Tax Reforms ◽  
Tax System ◽  
Tax Revenues ◽  
Fiscal Space ◽  
The Impact ◽  
The Eu

For many countries, the competitiveness of the tax system is a complex issue, as it not only reduces the tax burden on corporate income, whileensuring the intensification of economic development, but also leads to risks of lower tax revenues and loss of public financesustainability. Tax competition requires finding a compromise between ensuring investments and expanding fiscal space to deal withurgent socio-economic challenges in the face of new global challenges. The authors carried out a comparative analysis of the efficiency of tax reforms in terms of their impact onreducing the tax burden on business and increasing the competitiveness of tax systemsin the EU and Ukraine. Despite the success of such reforms in the EU, it was found that Ukrainian reforms have not been quite as efficient in achieving the appropriate level of investments and creating conditions for reducing the shadow economy. It is determined that tax reforms in Ukraine were carried out without considering specific effects of changes in corporate income taxation conditions, in particular, the impact of lower tax rates on tax revenues in the medium and long term, intensification of innovation and investment activities, investment dynamics abroad, etc. It is proved that the priority of increasing the international tax competitiveness of Ukraine should not consist intax ratesdecreasing and eliminationof tax restrictions on the formation of the corporate income tax base, but in the improvement of depreciation policy in terms of accelerating reimbursement of fixed assets and intangible assets, stimulating capital investment in the renewal of production on an innovative basis. It is substantiated that the development of the tax system of Ukraine (as well asother countries with small, open economy and with high level of corruption and shadow economy) should take place within the framework of a holistic concept of sustainable development, taking into account the possible consequences of budget decisions for both current and long-term budgets that will apply to future generations.

scholarly journals Laffer points, area of fiscal contradictions and taxpayers’ acceptance power

2019 ◽  
Vol 27 (1) ◽  
pp. 49-62
Author(s):  
Gleb V. Shcherbakov
Keyword(s):  
Mathematical Induction ◽  
Tax Burden ◽  
Mathematical Methods ◽  
Mathematical Economics ◽  
New Approach ◽  
Limit Concept ◽  
Laffer Curve ◽  
Turnover Ratio ◽  
Laffer Curves

The Laffer curve is the eternal problem of mathematical economics. Attempts to find the Laffer curve functions lead to new results that do not give the function in coordinates “tax burden - tax revenues” but give results in larger dimensions. Purpose of the article is developing tools to access the excessive tax burden on organizations. The general methods used in the article are analysis, generalization, synthesis. Special methods are mathematical induction, mathematical methods. In the study previously proposed mathematical models of Laffer curves by V.G. Papava (Ananiashvili, Papava, 2010) and E.V. Balatskii (Balatskii, 2000) are generalized and clarified. Taxation limit concept is expanded and necessity of determining the lower taxation limit is shown. The new approach to determining the values of Laffer points based on the use of tax burden and current assets turnover ratio is proposed. The determination of taxpayers’ acceptance power (in meaning “exponent”) is introduced and the property linking it with area of fiscal contradictions is shown. The constancy of the location of the first and second kind Laffer points is proved. Conditions limiting the sets of values of Laffer points are given. As a result the concept of the area of fiscal contradictions is divided with concepts of Laffer curves and Laffer points.

The Genesis and Internal Dynamics of El Salvador's People's Revolutionary Army, 1970–1976

2014 ◽  
Vol 38 (01) ◽  
pp. 102-129
Author(s):  
ALBERTO MARTÍN ÁLVAREZ ◽  
EUDALD CORTINA ORERO
Keyword(s):  
Latin America ◽  
El Salvador ◽  
Early Years ◽  
Left Wing ◽  
Internal Dynamics ◽  
Internal Coherence ◽  
The 1960S

AbstractUsing interviews with former militants and previously unpublished documents, this article traces the genesis and internal dynamics of the Ejército Revolucionario del Pueblo (People's Revolutionary Army, ERP) in El Salvador during the early years of its existence (1970–6). This period was marked by the inability of the ERP to maintain internal coherence or any consensus on revolutionary strategy, which led to a series of splits and internal fights over control of the organisation. The evidence marshalled in this case study sheds new light on the origins of the armed Salvadorean Left and thus contributes to a wider understanding of the processes of formation and internal dynamics of armed left-wing groups that emerged from the 1960s onwards in Latin America.

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