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Mr. Ricardo Fenochietto

Creditable to all Taxpayers with Limits IV. Conclusions and Policy Recommendations References Box 1. The VAT Impact on Low Income Individuals in LICs and EMEs Figures 1. Bolivia, PIT (VCR) Revenue 2. VAT Revenue and VAT Non-Compliance (2008–2018) 3. Imports and VAT Revenue (2008–2018) Tables 1. Countries with VAT as a Credit or Deduction to the PIT 2. PIT and Tax Revenue by Group of Countries 3. Ecuador – The Revenue and Equity Impacts of Eliminating the PIT deduction allowed for Personal Expenses 4. Ownership of Financial Accounts and

Mr. Ricardo Fenochietto

of VAT revenue as a share of GDP was not statistically different from zero once the policy change was enforced. This result was consistent after accounting for changes in household final consumption, imports and tax expenditures. Figure 2. VAT Revenue and VAT Non-Compliance (2008–2018) Source: IMF Staff based on data from SAT and Banco de Guatemala. 20. We also found that changes in VAT collection were statistically explained by changes in the level of imports and final consumption (Appendix I, Table 1 , column 1) but not by the reform . A second

Mr. Ricardo Fenochietto
This paper analyses and compares two different groups of tools, the first to encourage the use of invoices (or payment systems) and the second to refund the VAT to low-income individuals. The analysis contributes to the existing literature by providing a clear characterization between these two groups of tools that are too often misunderstood and offers clear guidance to policymakers on the benefits and pitfalls of them based on available empirical studies and novel data analysis. Briefly, the first group includes a set of regressive and distortive tools (such as, allowing deducting the VAT paid on personal consumption from the PIT and reducing the VAT rate for using electronic means of payments or registration), while the second group includes tools that are less distortionary and improve income distribution (tax credits and VAT rate reduction targeted only at low-income individuals). This paper also finds that allowing the deduction of personal consumption against the PIT’s taxable base (i) did not impact positively the VAT revenue in Guatemala and (ii) worsens the income distribution in Ecuador.
International Monetary Fund. Western Hemisphere Dept.

: Stylized Facts and Performance C. 2014 Tax Measures D. The Road Ahead BOXES 1. Progress and Challenges in Tax Administration 2. Mineral Taxation 3. The GST Withholding Schemes APPENDIX VAT Non-Compliance References

Caribbean and Central America countries have introduced them. Tax Revenue 13.7 18.7 17.5 25.2 Tax on income 4.0 5.0 5.4 11.6 PIT 1.2 1.5 1.6 8.9 CIT 2.0 2.8 3.1 2.8 VAT - ITBIS 4.9 5.4 6.4 6.7 Excise 2.8 1.7 1.7 2.6 On Inmovable Property 0.1 0.1 0.3 1.1 Others 1.3 0.7 1.8 1.6 VAT (ITBIS) Standard Rate 18.0 15.3 12.5 19.1 PIT Top Marginal Rate 25.0 23.7 29.3 35.7 PIT Lowest Rates 15.0 11.7 10.3 11.0 CIT Standard Rate 27.0 26.7 27.4 23.3 CIT and Dividend Rate 34.3 33.4 32.5 VAT Non-compliance 38.6 30.6 27.8 13.9 Tax Expenditure 6.7 3.8 3.5 - Table 1: Selected Tax

International Monetary Fund. European Dept.
This 2013 Article IV Consultation highlights that following a sharp downturn in 2009 in the context of the global economic and financial crisis, Slovakia emerged as one of the fastest-growing economies in the European Union, supported in particular by substantial foreign investment in the auto sector and subsequent exports. Growth slowed to 2 percent in 2012 as the impact of exceptionally large investments in 2011 faded. Inflation fell to 1.6 percent in June 2013, and record trade and current account surpluses were recorded in 2012. For 2013, the growth forecast is 0.6 percent, reflecting especially the weakening external environment.
International Monetary Fund. Western Hemisphere Dept.
A new political landscape is shaping up in Mexico following the July elections. President-elect López Obrador has promised to reduce corruption and crime, and boost social spending and public investment, while maintaining fiscal prudence. The incoming administration will inherit an economy with very strong fundamentals and policy frameworks that has exhibited resilience in the face of a complex external environment. But Mexico still confronts significant challenges—namely to strengthen growth while reducing poverty and inequality—and has yet to win the fight against corruption and crime. At the same time, uncertainty associated with the global economic environment and the policies of the incoming administration persists. Prospects hinge on the steadfast implementation of structural reforms while ensuring continued macroeconomic stability.
International Monetary Fund. Western Hemisphere Dept.
This Selected Issues paper describes recent investment dynamics in Peru, and assesses the relationship between private investment and its fundamentals. Over the last decade, average growth in Peru exceeded 6 percent, anchored by a substantial contribution from investment. A series of structural reforms in the 1990s, growing political stability, and the implementation of a solid macroeconomic framework in the early 2000s set the stage for this investment boom. Actions were also taken to strengthen public investment implementation and to enhance the overall investment climate. Now that commodity prices have softened and interest rates are expected to rise, addressing the next generation of structural reforms will be crucial to sustain investment and growth.
International Monetary Fund
The contraction in Romania’s domestic demand has set off a sharp correction in external imbalances and helped ease pressures on inflation. Real GDP contracted by 7.6 percent in the first half of 2009, compared with 2 percent projected under the program, on account of a sharp drop in domestic demand, especially consumption. This posed a particular challenge for public finances, where weakening revenues required sharp temporary cuts in spending to meet what turned out to be structurally tight targets. Monetary and exchange rate policies will remain anchored on targeting inflation over the medium term.