You are here

Available in: EnglishEspañol

The redistributive potential of taxation in Latin America

Publication cover
Author: Hanni, Michael - Martner Fanta, Ricardo - Podestá, Andrea UN symbol.: LC/G.2643-P p. 7-26; grafs., tabls. August 2015

Description

This study uses internationally comparable methodologies to analyse the distributional impact of income tax and public transfers in 17 countries of Latin America. The results indicate that fiscal policy plays a limited role in improving the distribution of disposable income; the Gini coefficient decreased by barely three percentage points after direct fiscal action. On average, 61% of this reduction was due to public cash transfers and the rest to direct taxes, reflecting the pressing need for personal income tax to be strengthened. Analysis of household surveys gives an indication of the potential effects of tax reforms aimed at increasing the average effective tax rate of the top income decile. Allocating this additional revenue to targeted transfers would produce significant results. Consequently, tax reforms must be evaluated bearing in mind how those resources are used.

Search publications

See publications list

CEPAL Review no. 116

Subscription

Get ECLAC updates by email

Subscribe