Some Principles of Taxation for Latin America: Lessons from the USA and European Experiences
The countries of the world have public finance systems that can generally be broken down into three categories. Advanced western democracies (and Japan) have long-established, often complex systems. Emerging economies such as those in Eastern Europe and China are in the process of moving from central planning to a market system, and are building their tax systems more or less from scratch, often basing them on western models. Other economies, such as some of the democracies in Latin America, have tax systems that are somewhere between the other two models. They may be long-established, and they may be based on the public finance system of the economically advanced economies, but they do not function in the same way as advanced systems. Collection is a problem, as is gathering the data necessary to determine tax liability. This paper outlines the major taxes and tax philosophies that advanced western economies have accepted and implemented and urges Latin American countries that are trying to make their public finance systems more "western" not to adopt western systems blindly, but to first take a close look at how western systems have worked. With careful analysis, Latin American countries can select the best parts of western public finance while avoiding the worst parts.
|Date of creation:||30 May 1998|
|Note:||Type of Document - Word 6.0 (Mac); prepared on Macintosh; to print on LaserWriter 4/600PS; pages: 15 . This paper was presented at the 14th Conference of the Business Association of Latin American Studies, Rio de Janeiro, Brazil, April, 1997|
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