Overview
Studies the initial impact of consumer-driven business formalization in Paraguay, the first of its kind in the developing world
Offers new insight into a one-of-a-kind tax policy experiment as a vehicle to reduce informality
Derives from interviews with market participants, bureaucrats, current and former leading politicians, and experts in Paraguay
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Table of contents (7 chapters)
Keywords
About this book
In developing countries, such as Paraguay, informality remains a prevalent and persistent issue. Many avoid formal registration with the authorities and evade tax payments. However, a growing academic literature argues for an interrelation between a broader tax base and a country’s economic and democratic development. A strand of this literature focuses on the means of taxing the informal sector and argues for positive revenue and growth effects. This Palgrave Pivot analyses Paraguay’s 2004 and 2012 tax reforms using both qualitative and quantitative data. It illustrates that the country’s personal income tax, as well as other alterations in the tax system, constitute an incentive and nudging mechanism that leads to a formalisation process of economic activity, and consequently to a broader tax base. Using interview and tax data, the book demonstrates how the reform initiates a rising demand of formalised purchases from both customers and businesses. It further suggests a potential way of how the taxpayers respond politically to the enhanced fiscal imperative.
Authors and Affiliations
About the author
Jonas Richter holds an MPhil in Development Studies from Oxford University, UK and a BA in Economics and Business Studies from the University of Stirling. He has since worked at the World Bank. His research interest encompasses firm development, informality, tax-regimes and productive inclusion.
Bibliographic Information
Book Title: Formalisation Through Taxation
Book Subtitle: Paraguay’s Approach and Its Implications
Authors: Jonas Richter
DOI: https://doi.org/10.1007/978-3-030-29282-9
Publisher: Palgrave Pivot Cham
eBook Packages: Economics and Finance, Economics and Finance (R0)
Copyright Information: The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2019
Hardcover ISBN: 978-3-030-29281-2Published: 21 October 2019
eBook ISBN: 978-3-030-29282-9Published: 09 October 2019
Edition Number: 1
Number of Pages: XIII, 117
Number of Illustrations: 9 b/w illustrations
Topics: Development Economics, Latin American and Caribbean Economics, Business Taxation/Tax Law, Economic Policy