Should LATAM countries rely more on indirect taxes?
A tax structure levying consumption excessively, may end up promoting volatility of growth rate, hence further affecting long term growth in some Latin American economies.
So, why should Latin-American countries – which have strong problems to stabilize their economies – introduce reforms to increase the weight of conpsumption taxes while:
a. these economies already relay heavily on indirect taxes?
b. further increase on consumption based taxes may exacerbate already procyclical behavior of fiscal policies?
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