Taxation for development: What can we learn from Latin America?

​This event discusses the Inter-American Development Bank’s recent book “More Than Revenue: Taxation as a Development Tool” and its implications beyond Latin America. The book argues that countries in Latin America and the Caribbean have made great strides in boosting tax collection in recent years, but they need a new generation of fiscal and tax reform to reduce income inequality, cut evasion, boost productivity, strengthen local governments and preserve the region’s natural resources. Taxation is largely viewed in the region as a means of generating income to pay governments’ bills, rather than as a valuable instrument to achieve important development goals. Although countries in the region have strengthened their tax administrations, boosting collection by 2.7 percent of GDP over the past two decades, the fastest rate in the world. However, the region still takes in just 17 percent of GDP in tax revenue, less than it should, given its per capita incomes. The success – and failure – of Latin America to use taxation as a tool for development holds important lessons for other regions.