Tax system reform in Latin America: Domestic and international causes

Throughout the past 20 years, Latin American countries have undertaken a battery of reforms to create simpler, more efficient tax systems with a greater emphasis on indirect taxes of broader bases, and more moderate marginal tax rates. This article aims to elucidate the amalgam of domestic and international forces that have fostered the reform of tax systems throughout Latin America. Domestic pressures stemmed from the debt crisis, the accompanying fiscal crisis of the state and the vital need to restore a measure of governance. International pressures emanated from the conditionality packages imposed by the International Monetary Fund, new intellectual winds in the field of economics, and economic globalization.