Page 16 - ATODAY
P. 16
A16
LOCALWednesday 6 April 2016
ECLAC Calls for Measures to Tackle Tax Evasion Amid Slow Economy
-Tax revenues are the Alicia Bárcena, ECLAC’s Executive Secretary, during the launch of a report on indigenous peoples future at the regional level,
cornerstone of the basic in Latin America. with most South American
financing of modern countries remaining sad-
State, according to the (UN Photo/Kim Haughton) dled with uncertainty be-
Commission’s new report. cause of the slowdown in
resents 2.2 points of GDP potential tax resources. larly, with income tax eva- China and other emerging
ORANJESTAD/SANTIAGO - in terms of value added According to the docu- sion there has been no sig- nations in 2016, while Mex-
Evasion is one of the main tax (VAT) at the regional ment, there was an across- nificant progress in recent ico, Central America and
weaknesses of the tax sys- level, and 4.1 GDP points in the-board decline in VAT years. the Caribbean will benefit
tems in the region’s econ- terms of income tax. While evasion up to 2007-2008, The Fiscal Panorama 2016 from positive growth rates,
omies, accounting for 320 ECLAC acknowledges the although that favourable states that, last year, Latin and from falling oil prices in
billion dollars in 2014 - ac- difficulties of bringing these trend was reversed due to America recorded a slight the latter two subregions.
cording to the Fiscal Pan- numbers down against a the financial crisis. average reduction in fiscal In order to protect and
orama of Latin America backdrop of reduced eco- The Commission describes accounts, and reached a boost public investment
and the Caribbean 2016, nomic buoyancy, it does the need for more in-depth fiscal deficit of 3.0% of GDP and growth, the United
launched today by ECLAC. call for increased efforts to refroms of the structure and and public borrowing of Nations Economic Com-
Tax revenues are the cor- avoid a substantial loss of administration of VAT. Simi- 34.7% of GDP. Out of the mission highlights the need
nerstone of the basic fi- 19 countries studied, 11 si- to strengthen counter-cy-
nancing of modern State, multaneously increased clical institutional arrange-
and it is therefore vital to their fiscal deficit and pub- ments to reduce harm-
prioritize the creation of a lic debt as a proportion of ful cycles of expansion
tax culture in which evad- GDP. and contraction of public
ers are effectively pun- According to the report, spending. Fiscal adjust-
ished – according to the the slowdown in economic ments should therefore aim
ECLAC document that growth and the worsening to attract investment that
was presented at the XXVIII terms of trade have had leads to growth, accord-
Regional Seminar on Fiscal dramatic effects on the ing to ECLAC.
Policy, which was held at public finances in many The report affirms that 2015
the Commission’s head- of the region’s countries, was marked by a loss of
quarters in Santiago, Chile with many having to carry income from non-renew-
in late March. out significant fiscal adjust- able natural resources, al-
The report (available only ments. though this was offset by
in Spanish) by the Econom- ECLAC outlines an uneven higher tax revenues result-
ic Commission for Latin ing from reform. On aver-
America and the Carib- age, the region increased
bean (ECLAC) states that its tax burden by 0.2 per-
fiscal non-compliance rep- centage points of GDP,
mainly thanks to improved
collection of income tax.
The main conclusions of
the Fiscal Panorama of
Latin America and the
Caribbean 2016 were pre-
sented at the first session of
the XXVIII Regional Semi-
nar on Fiscal Policy, which
was attended by ECLAC
Executive Secretary, Ali-
cia Bárcena, and Chilean
Finance Minister, Rodrigo
Valdés, among other spe-
cial guests.q
