ECLAC Criticizes Tax Privileges in Latin America and the Caribbean

Havana, May 10 (Prensa Latina) The Latin American and Caribbean tax system expresses how deep-rooted the culture of privileges is in the region and stops countries from having important resources for social benefit public policies, said here today the Economic Commission for Latin America and the Caribbean (ECLAC).

Granting exemptions to large companies and wealthy people give a view of the problem, to which low income taxes and the phenomena of tax evasion and avoidance are joined, considered the United Nations agency.

The executive secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), Alicia Barcena, regretted that while a few monopolize the benefits, the socialization of the negative impacts due to the flight of resources increases.

From the report ‘Inefficiency of inequality’, the agency invited to find solutions to put an end to iniquity in its economic, political, social and environmental dimensions.

The issue was the focus of the 37th session of ECLAC, which will conclude Friday, after five days of debate under the pro tempore presidency of Cuba.

As the agency recalled, a large part of the tax burden in the area is indirect and falls on consumption; while, the income tax is lower than the average registered by the member states of the Organization for Economic Cooperation and Development (OECD).

However, he noted, the effectiveness of fiscal policy instruments to reduce inequality is very heterogeneous in the Latin American and Caribbean context.

In the opinion of the source, ‘the meager redistributive effect of taxation, whether due to the composition and tax burden, the lack of effective control or the current royalties, is part of a system of privileges’ quite widespread.

‘Those who have more do not perceive the social commitment to contribute to the common good through taxation, remarked the analysis.

Inequality, valued ECLAC, not only has economic consequences, but also political, social and cultural effects, because it tends to reproduce fragmented societies, with low social interaction, limited reciprocal trust and weak sense of belonging.

Likewise, ECLAC summarized, it limits the perception of common projects and the defense of public goods.

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