The Roots of Brazil's Heavy Taxation

Abstract

Latin America is widely known as a low-tax region, but Brazil defies that description with a tax burden almost double the regional average. Though longstanding, Brazil’s position atop the tax burden ranking is not a historical constant. As recently as the early 1950s three other countries, Argentina, Chile and Uruguay, had similar or even heavier burdens. However, by the early 1980s Brazil had emerged as the most heavily taxed country in Latin America, and subsequent decades reinforced that status. This article seeks to uncover the roots of Brazil’s heavy taxation by examining the process through which it rose to the top of the regional ranking and managed to stay there. It emphasises two variables, the social class bases of public sector growth and the degree of support for democracy among key political actors. Despite changing over time, these variables have consistently interacted in ways that favour rising taxation.

Analysis of the Determinants of Tax Policy Compliance in Nigeria

“…Bird (2012 andPrichard (2015) contend that taxation could help to create a fiscal exchange between citizens and government in respect of the quality of public good, trust, and income. This is because some Nigerian citizens avoid paying taxes as a form of protest for the lack of quality public goods and services (Alabede 2014;Flores-Macias 2018;Fjeldstad 2014;Jibao & Prichard 2015;Ondetti 2015).…”

“…The literature on tax compliance in Africa identifies economic recession, hyperinflation, natural disaster, high unemployment, safety and security. In addition, low level of education, trust in government; equity in the distribution of goods and services, corruption as well as more structural factors tends to affect governments" ability to collect tax or enforce tax compliance (Agbadi 2011;Fagbemi & Abogun 2014;Fjeldstad 2014;Jibao & Prichard 2015;Ondetti 2015;Prichard 2015). Therefore, the dependence on taxes would require the Federal Government of Nigeria to develop pragmatic bureaucratic departments or agencies for tax administration as well as proactive collection systems in the country (Fjeldstad 2014;Okaura 2012;Usman 2008).…”

Progressive tax policy and informal labor in developing economies

“…2 Table A8 in the Supporting Information shows the amount of nontax revenue (as %GDP) available to Latin American governments between 1990 and 2015. 3 In Brazil, however, economic elites, at least during their Cold War, were united in their broad support for state-led development (Ondetti, 2015). In Colombia, the cohesion of business and government elites actually partly facilitated a series of wealth taxes (see Flores-Macías, 2014).…”

“…In Brazil, however, economic elites, at least during their Cold War, were united in their broad support for state‐led development (Ondetti, ). In Colombia, the cohesion of business and government elites actually partly facilitated a series of wealth taxes (see Flores‐Macías, ).…”

Building support for taxation in developing countries: Experimental evidence from Mexico

“…The literature on the politics of taxation in developing countries has focused on events that are beyond policymakers' control. These include crises, such as economic downturns (Bird 1992;Sanchez 2006), hyperinflation (Mahon Jr. 2004), banking system failure (Hallerberg and Scartascini 2015) and natural disasters (Fairfield 2015); as well as a number of more structural factors affecting governments' ability to tax, including regime type (Cheibub 1998), the economy's degree of openness and sectoral configuration (Musgrave 1969;Bahl 1971), class or group-based power (Best 1976;Fairfield 2010Fairfield , 2015Flores-Macías 2014;Richter et al 2009;Timmons 2005), race (Lieberman 2003), ethnicity (Jibao and Prichard 2015), and historical legacies (Ondetti 2012(Ondetti , 2015. The emphasis on crises or structural factors has come at the expense of our understanding of the conditions under which the public is likely to lend political support to fiscal reform.…”