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Tax Morale and Tax Evasion in Latin American Countries

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Abstract

It is hard for tax administrations to levy and collect taxes anywhere and anytime. However, taxing certain kinds of activities, sectors, or individuals – the so-called “informal sector” – is an additional challenge for tax administrations in both developing and developed countries, and the “fiscal gap” that arises from the failure to tax this sector can be quite large. This issue is especially pressing in Latin America and Caribbean (LAC) countries, where often over half of the workforce is found in the informal sector. In this paper we examine taxation and tax compliance in LAC countries – and beyond – focusing on several main questions. What is meant by the “informal sector”? What is the size of informal sector in LAC countries? What are some effects from an informal sector, including the size of the “fiscal gap”? What are the reasons for this fiscal gap? What can be done to address these various issues?

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Bibliographic Info

Paper provided by International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University in its series International Center for Public Policy Working Paper Series, at AYSPS, GSU with number paper0732.

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Length: 84 pages
Date of creation: 01 Dec 2007
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Handle: RePEc:ays:ispwps:paper0732

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Keywords: Tax Morale; Tax Evasion; Tax compliance; Latin American Countries;

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Citations

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Cited by:
  1. Guillermo E. Perry & William F. Maloney & Omar S. Arias & Pablo Fajnzylber & Andrew D. Mason & Jaime Saavedra-Chanduvi, 2007. "Informality : Exit and Exclusion," World Bank Publications, The World Bank, number 6730, February.
  2. Jorge Martinez-Vazquez & VIoleta Vulovic, 2011. "Tax Structure in Latin America: Its Impact on the Real Economy and Compliance," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1122, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.

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