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Evaluación del Sistema Tributario Chileno y Propuesta de Reforma

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  • Pablo Serra

Abstract

This paper proposes the substitution of the current income tax system for a simplified consumption tax (SCT),consisting of a cash-flow tax (CST) with a rate of 26%, and a tax on wages with a maximum rate also of 26%. Preliminary estimates indicate that these taxes would maintain tax revenues constant while, at the same time, simplify the tax system and lower administrative and enforcement costs. Moreover, distortions would be diminished as an income tax would be replaced by a consumption tax. Vertical equality would not be significantly changed, but horizontal equality would improve. The paper also considers two alternatives to the CST: the hybrid tax and the tax on dividends, concluding that the second is the less attractive option.

Suggested Citation

  • Pablo Serra, 1998. "Evaluación del Sistema Tributario Chileno y Propuesta de Reforma," Working Papers Central Bank of Chile 40, Central Bank of Chile.
    • Handle: RePEc:chb:bcchwp:40
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    File URL: https://www.bcentral.cl/documents/33528/133326/DTBC_40.pdf
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    References listed on IDEAS

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    Cited by:

    1. Pablo Serra, 2000. "Fundamentos para una Reforma Tributaria en Chile," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 37(111), pages 299-322.

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