Estimating Tax Noncompliance in Latin America: 2000-2010

Tackling tax noncompliance is vital for Latin American countries to effectively increase their tax collection levels and thus adequately provide the services demanded by their citizens.
May 2013

Understanding and measuring tax noncompliance is important since it fundamentally limits the resources available for implementing State policies. Knowing the extent of the tax noncompliance problem, its evolution over time, detailed characteristics, and understanding the implicit subjectivity of its various forms, allows better orientation and coordinationg of necessary actions. 
 
Since the 1970's, there have emerged different methodologies for measuring tax noncompliance all of which, with the passing of the years, have been applied by several developing countries depending on their specific cirumstances and the information available. The present study discusses these methods and points out their advantages and disadvantages, while highlighting the major obstacles to overcome in their application. Additionally, quantitative information on tax noncompliance in Latin America from recent works is presented, along with some of our own measurements in order to assess this phenomenon in the period 2000-2010.