High taxes and evasion erodes region’s economic growth

The Inter-American Development Bank (IDB) is urging governments in the Caribbean and Latin America to simplify their tax systems and reduce evasion.



In a recently released study, the IBD says complex tax systems and widespread evasion in the region are distorting investment decisions by companies in Latin America and the Caribbean.



It says this helps to reduce the efficiency of markets and prevent governments from investing in infrastructure, education and other key public goods.



The Washington-based bank says by shifting to smarter tax programmes, governments can increase their revenue intake to finance much-needed social and investment programs without hurting productivity and growth.