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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?

Suggested Citation

  • James Alm & Jorge Martinez-Vazquez, 2007. "Tax Morale and Tax Evasion in Latin American Countries," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0732, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  • Handle: RePEc:ays:ispwps:paper0732
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    File URL: http://icepp.gsu.edu/files/2015/03/ispwp0732.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Ortega, Daniel & Scartascini, Carlos, 2015. "Don’t blame the Messenger. A Field Experiment on Delivery Methods for Increasing Tax Compliance," Research Department working papers 821, CAF Development Bank Of Latinamerica.
    2. Cristian Sepulveda & Jorge Martinez-Vazquez, 2012. "Explaining property tax collections in developing countries: the case of Latin America," Chapters,in: Decentralization and Reform in Latin America, chapter 7, pages iii-iii Edward Elgar Publishing.
    3. Castro, Lucio & Scartascini, Carlos, 2015. "Tax compliance and enforcement in the pampas evidence from a field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 65-82.
    4. Mattos, Enlinson & Rocha, Fabiana & Toporcov, Patricia, 2013. "Programas de incentivos fiscais são eficazes? Evidência a partir da avaliação do impacto do programa nota fiscal paulista sobre a arrecadação de ICMS," Revista Brasileira de Economia - RBE, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil), vol. 67(1), April.
    5. Martínez-Vázquez, Jorge & Vulovic, Violeta, 2011. "Tax structure in Latin America: its impact on the real economy and compliance," Research Department working papers 224, CAF Development Bank Of Latinamerica.
    6. Salar, Laleena & Zaman, Khalid & Khilji, Bashir Ahmad & Khan, Muhammad Mushtaq & Lodhi, Mohammad Saeed, 2013. "The consequences of revenue gap in Pakistan: Unveiling the reality," Economic Modelling, Elsevier, vol. 30(C), pages 281-294.
    7. Víctor Mauricio Castañeda Rodríguez, 2014. "El gasto social como factor que favorece una mayor dependencia del IVA. Un análisis para el caso colombiano," REVISTA ECOS DE ECONOMÍA, UNIVERSIDAD EAFIT, June.
    8. 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.
    9. Daniel Ortega & Carlos Scartascini, 2015. "Don't Blame the Messenger: A Field Experiment on Delivery Methods for Increasing Tax Compliance," IDB Publications (Working Papers) 91741, Inter-American Development Bank.
    10. repec:fgv:epgrbe:v:67:n:1:a:5 is not listed on IDEAS

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