Political Economy of Multi-Level Tax Assignments in Latin American Countries: Earmarked Revenue Versus Tax Autonomy

Giorgio Brosio and Ehtisham Ahmad

No 2008/071, IMF Working Papers from International Monetary Fund

Abstract: A weakness of decentralization and overall tax reforms in Latin America is the lack of attention to adequate taxation at the subnational government. A reliance on shared taxes with extensive earmarking leads to weak subnational accountability and soft budget constraints. The paper explores the options for expanding subnational taxation in Latin America. A range of subnational tax instruments might be considered, but interactions between new tax assignments and the system of transfers is important from a political economy perspective.

Keywords: WP; tax administration; personal income; federal government; tax reform; reform agenda; VAT-type tax (search for similar items in EconPapers)
Pages: 27
Date: 2008-03-01
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Citations: View citations in EconPapers (16)

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