CIAT
•
•
News
•
About CIAT
•
International Cooperation
•
Products and Services
•
Blog
Login
Close
Span
S
ish |
e
Cont
a
act
rc
us
h
M
Search...
•
Archived News
•
e-CIAT Newsletter
•
The Executive Secretary in the Press
•
External sources information
•
Member Countries
•
Organizational Structure
•
Strategic Guidelines
•
Our History
•
Participate
•
Contact Us
•
Frequently Asked Questions
•
Map Presentation
•
Strategic Alliances
•
International Activities
•
Initiative Portfolio
•
Links of Interest
•
My CIAT
•
Technical Assistance
•
Training
•
CIATData
•
Publications
•
Surveys
•
Library
•
About Blog
•
Bloggers
•
Skip to content
News > Archived News > CIAT News > CIAT, IDB, OECD Latin America and the Caribbean: Low personal income taxes lead to lower taxes on wages compared with OECD
CIAT, IDB, OECD - Latin America and the Caribbean: Low personal income taxes lead to lower taxes on
Latest News •
wages compared with OECD
CIAT, IDB, OECD - Latin America
Linkedin Twitter
Youtube
and the
RSS
Caribbean: Low personal income taxes lead to lower taxes on
Share
wages compared
Buenos Aires, 26
Object 1
September 2016 -
with OECD •
Latin America:
Taxes on the labour
Brief review of
income of the average
the legislation
worker in Latin American and Caribbean (LAC)
Tax Systems in
(Spanish Only) •
El Programa de Cooperación
countries totalled
CIAT-SECO
21.7% of total labour
cumplió su
costs in 2013, one-
primer año de
third lower than in OECD countries, where the average was 35.9%, according to the first edition of
ejecución
Taxing Wages in Latin America and the Caribbean. More than 90% of the difference between LAC and
contribuyendo al
OECD is due to personal income tax (13% of total labour costs).
fortalecimiento de
The new report, covering 20 LAC countries, was produced jointly by the Inter-American Centre of Tax
administraciones
Administrations (CIAT), the Inter-American Development Bank (IDB), the Development Centre and the
tributarias de
Centre for Tax and Policy Administration both of the Organisation for Economic Co-operation and
América Latina y
Development (OECD). The report was launched today in Buenos Aires during the VI LAC Fiscal Policy
el Caribe (ALC)
Forum hosted by Argentina’s Ministry of Treasury and Public Finances. •
Executive
The relatively low level of the LAC tax wedge - which measures the difference between an employer’s
Secretary
labour costs and an employee’s corresponding net take-home pay – reflects very low average personal
participates in
income tax (PIT) rates. In fact, Mexico was the only country included in the report where workers had to
CEATS Working
pay PIT at the average wage level. In comparison, PIT represented 13.3% of the labour costs of an
Sessions in
average worker in OECD countries. In the LAC region, the vast majority of the working population have
Argentina
incomes below the minimum PIT thresholds due to generous specific allowances. The prevalence of
•
New edition of the Tax
informal labour markets and tax evasion also contribute to the low levels of PIT revenues.
Administration The tax wedge for the average one-earner married couple with two children in LAC countries was 21.4%,
Review
only 0.3 percentage points less than that of the single worker, according to the report. The corresponding
CIAT/AEAT, No.
difference in OECD countries, where working family benefits are substantially higher, was 9.5 percentage
41/IEF
points. Family allowance schemes exist in only five of the 20 LAC countries – Argentina, Brazil, Chile,
•• Mobile Version
Colombia and Uruguay – and are unavailable at the average wage level in Chile. • A special chapter of the report explores the relationships between taxes on wages, characteristics of labour markets and levels of labour informality in LAC countries. The interaction
Top