03 July 2013
Category : Opinion
Fiscal education and the puzzle of social cohesion in Latin America
Latin America´s development policies are going through crucial times. In a context of deterioration of the world economy, the region continues along the road of growth, employment and the reduction of poverty. However, there are major challenges. The crisis in the euro zone and the slowdown in the USA and China are affecting the growth of Latin America, which will fall to 3.5% in 2013. As a recent study by the World Bank highlighted, growth will increasingly depend on each country’s policies rather than external factors.
While the affirmation by the Mexican author Carlos Fuentes that “the pretexts to justify poverty in Latin America have ended” is true, 3 out of 10 Latin Americans are still poor and 1 in 10 suffers from extreme poverty. Inclusive growth is the last important challenge pending in a region with the highest concentration of wealth on the planet and the largest informal economy compared to GDP.
More efficient public policies are needed and greater tax revenue must be generated. The tax burden – 19.2% of GDP – is still a long way behind the average of 33.8% in the countries of the OECD and there are still high levels of corruption. According to the data from Latinobarómetro, half of all citizens do not pay the taxes they should and just 47% consider taxes to be an essential aspect of the exercise of citizenship. Tax fraud is justified on the pretext that the State does not fulfil their side of the social contract, and at the same time the services cannot be improved because the revenue is insufficient.
It is vital to promote a new tax culture. In addition to warning taxpayers of the risk of being punished, the tax administrations in Latin America are increasingly aware that education is required from an early age so that citizens internalise the notion that they must pay their taxes. Thus, fiscal education is one of the strategic lines of almost all the tax administrations in Latin America. The oldest programmes are those of Brazil (1996) and Argentina (1997), and the most recent one is that of Bolivia (2011).
The current scenario, however, invites optimism. After years of disagreements, the Education Ministries are starting to see the benefits of collaboration with the tax agencies for fiscal education in the classroom, related to values and citizenship. But talking to young people about taxes is quite a challenge. That is why the non-formal fiscal education strategies include spaces for leisure, festivals, theatre, videogames, TV series, music or competitions.
Fiscal education is a process which brings results in the medium and long term. The short-term goal is that fiscal education should be considered an important part of social transformation.
Borja Díaz Rivillas
Senior Technician of the FIIAPP / EUROsociAL II
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