Taxing Wages in Latin America and the Caribbean 2016 (eBook)
284 Seiten
OECD Publishing (Verlag)
978-92-64-26504-2 (ISBN)
This new high profile report provides details of taxes paid on wages in twenty economies in Latin America and the Caribbean. It covers: personal income taxes and social security contributions paid by employees; social security contributions and payroll taxes paid by employers; cash benefits received by in-work families.
It illustrates how these taxes and benefits are calculated in each member country and examines how they impact on household incomes. The results also enable quantitative cross-country comparisons of labour cost levels and the overall tax and benefit position of single persons and families on different levels of earnings.
The publication shows the amounts of taxes and social security contributions levied and cash benefits received for eight different family types which vary by a combination of household composition and household type. It also presents the resulting average and marginal tax rates (i.e. the tax burden). Average tax rates show that part of gross wage earnings or total labour costs which is taken in tax and social security contributions (both before and after cash benefits). Marginal tax rates show the part of a small increase of gross earnings or total labour costs that is paid in these levies.
The data presented can be used in academic research and to analyse tax, social and economic policies in Latin America and the Caribbean.
This new high profile report provides details of taxes paid on wages in twenty economies in Latin America and the Caribbean. It covers: personal income taxes and social security contributions paid by employees; social security contributions and payroll taxes paid by employers; cash benefits received by in-work families. It illustrates how these taxes and benefits are calculated in each member country and examines how they impact on household incomes. The results also enable quantitative cross-country comparisons of labour cost levels and the overall tax and benefit position of single persons and families on different levels of earnings. The publication shows the amounts of taxes and social security contributions levied and cash benefits received for eight different family types which vary by a combination of household composition and household type. It also presents the resulting average and marginal tax rates (i.e. the tax burden). Average tax rates show that part of gross wage earnings or total labour costs which is taken in tax and social security contributions (both before and after cash benefits). Marginal tax rates show the part of a small increase of gross earnings or total labour costs that is paid in these levies. The data presented can be used in academic research and to analyse tax, social and economic policies in Latin America and the Caribbean.
Foreword 5
Acknowledgements 6
Table of contents 7
Executive summary 13
Other key findings 14
Chapter 1 Overview 15
1. Introduction 16
2. Review of Results for 2013 17
2.1. Tax wedge 17
Table 1.1. Composition of the total tax wedge, 2013 17
Figure 1.1. Income tax plus employee and employer social security contributions, 2013 18
2.1.1. Personal average tax rates 18
Table 1.2. Income tax plus employee social security contributions, 2013 19
Figure 1.2. Percentage of gross wage earnings paid in income tax and employee social security contributions, 2013 20
2.1.2. Family tax rates 20
Table 1.3. Comparison of total tax wedge by family type, 2013 21
2.1.3. Tax wedges by income deciles 21
Figure 1.3. Income tax plus employee and employer social security contributions less cash benefits, 2013 22
Table 1.4. Tax wedges for a single earner without children by income decile, 2013 22
Table 1.5. Tax wedges for a one-earner married couple with two children by income decile, 2013 23
Figure 1.4. Average LAC country wedge decomposition for a single earner with no children 23
Figure 1.5. Average LAC country tax wedge decomposition of one-earner married couple with two children 24
2.1.4. Tax wedges for earned income in USD 24
Table 1.6. Total tax wedges for a single worker without children 25
Table 1.7. Total tax wedges for a one-earner married couple with two children, 2013 25
2.1.5. Wages 26
Table 1.8. Comparison of average wage levels 26
Notes 27
References 27
Chapter 2 A view on taxes, social protection and informality in Latin America using Taxing Wages modelling 29
1. Introduction 30
2. Taxation in Latin America: A work in progress 31
Figure 2.1. Total tax revenues as a percentage of GDP in Latin America and the OECD, 2014 31
Figure 2.2. Taxes on labour income in OECD and Latin American and Caribbean countries, 1990-2014 32
3. Labour markets in Latin America: Informal is normal 33
Figure 2.3. Formality rate in Latin American and Caribbean countries 34
Figure 2.4. Informality rates in Latin American countries, by quintile of per capita family income, 2013 34
Figure 2.5. Occupational status in the labour market and informality among employees and the self-employed, 2013 35
Figure 2.6. Transitions to and from unemployment, formality and informality in Latin American countries, 2013 (%) 36
4. Social security contributions and informality: In it together? 36
Figure 2.7. Theoretical formality costs and informality rates for dependent workers in Latin American countries, 2013 38
Figure 2.8. The relationship between formalisation costs and informality 41
5. Conclusions 42
Notes 42
References 43
Part I International Comparisons 45
Chapter 3 2013 tax burdens 47
Average tax burdens, 2013 estimates 48
Marginal tax burdens, 2013 estimates 51
Table 3.1.a. Income tax plus employee and employer contributions less cash benefits, family profiles, 2013 54
Figure 3.1.a. Income tax plus employee and employer contributions less cash benefits, 2013 55
Table 3.1.b. Income tax plus employee and employer contributions less cash benefits, income deciles 1-5, 2013 56
Figure 3.1.b. Income tax plus employee and employer contributions less cash benefits, 5th income decile, 2013 57
Table 3.1.c. Income tax plus employee and employer contributions less cash benefits, income deciles 6-10, 2013 58
Figure 3.1.c. Income tax plus employee and employer contributions less cash benefits, 10th income decile, 2013 59
Table 3.1.d. Income tax plus employee and employer contributions less cash benefits, USD equivalent earnings, 2013 60
Figure 3.1.d. Income tax plus employee and employer contributions less cash benefits, USD equivalent earnings, 2013 61
Table 3.2.a. Income tax plus employee social security contributions less cash benefits, family profiles, 2013 62
Figure 3.2.a. Income tax plus employee social security contributions less cash benefits, 2013 63
Table 3.2.b. Income tax plus employee social security contributions less cash benefits, income deciles 1-5, 2013 64
Figure 3.2.b. Income tax plus employee social security contributions less cash benefits, 5th Income decile, 2013 65
Table 3.2.c. Income tax plus employee social security contributions less cash benefits, income deciles 6-10, 2013 66
Figure 3.2.c. Income tax plus employee social security contributions less cash benefits, 10th income decile, 2013 67
Table 3.2.d. Income tax plus employee social security contributions less cash benefits, USD equivalent earnings, 2013 68
Figure 3.2.d. Income tax plus employee social security contributions less cash benefits, USD equivalent earnings, 2013 69
Table 3.3.a. Income tax, family profiles, 2013 70
Table 3.3.b. Income tax, income deciles 1-5, 2013 71
Table 3.3.c. Income tax, income deciles 6-10, 2013 72
Figure 3.3. Income tax, 10th income decile, 2013 73
Table 3.3.d. Income tax, USD equivalent earnings, 2013 74
Table 3.4.a. Employee social security contributions, family profiles, 2013 75
Figure 3.4.a. Employee social security contributions, 2013 76
Table 3.4.b. Employee social security contributions, income deciles 1-5, 2013 77
Figure 3.4.b. Employee social security contributions, 5th income decile, 2013 78
Table 3.4.c. Employee social security contributions, income deciles 6-10, 2013 79
Figure 3.4.c. Employee social security contributions, 10th income decile, 2013 80
Table 3.4.d. Employee social security contributions, USD equivalent earnings, 2013 81
Figure 3.4.d. Employee social security contributions, USD equivalent earnings, 2013 82
Table 3.5.a. Marginal rate of income tax plus employee and employer contributionsless cash benefits, family profiles, 2013 83
Table 3.5.a. Marginal rate of income tax plus employee and employer contributions less cash benefits, family profiles, 2013 83
Figure 3.5.a. Marginal rate of income tax plus employee and employer contributions less cash benefits, 2013 84
Table 3.5.b. Marginal rate of income tax plus employee and employer contributions less cash benefits, income deciles 1-5, 2013 85
Figure 3.5.b. Marginal rate of income tax plus employee and employer contributions less cash benefits, 5th income decile, 2013 86
Table 3.5.c. Marginal rate of income tax plus employee and employer contributions less cash benefits, income deciles 6-10, 2013 87
Figure 3.5.c. Marginal rate of income tax plus employee and employer contributions less cash benefits, 10th income decile, 2013 88
Table 3.5.d. Marginal rate of income tax plus employee and employer contributions less cash benefits, USD equivalent earnings, 2013 89
Figure 3.5.d. Marginal rate of income tax plus employee and employer contributions less cash benefits, USD equivalent earnings, 2013 90
Table 3.6.a. Marginal rate of income tax and employee contributions less cash benefits, family profiles, 2013 91
Figure 3.6.a. Marginal rate of income tax and employee contributions less cash benefits, 2013 92
Table 3.6.b. Marginal rate of income tax and employee contributions less cash benefits, income deciles 1-5, 2013 93
Figure 3.6.b. Marginal rate of income tax and employee contributions less cash benefits, 5th income decile, 2013 94
Table 3.6.c. Marginal rate of income tax and employee contributions less cash benefits, income deciles 6-10, 2013 95
Figure 3.6.c. Marginal rate of income tax and employee contributions less cash benefits, 10th income decile, 2013 96
Table 3.6.d. Marginal rate of income tax and employee contributions less cash benefits, USD equivalent earnings, 2013 97
Figure 3.6.d. Marginal rate of income tax and employee contributions less cash benefits, USD equivalent earnings, 2013 98
Table 3.7.a. Increase in net income after an increase of 1 currency unit in gross wage earnings, family profiles, 2013 99
Table 3.7.b. Increase in net income after an increase of 1 currency unit in gross wage earnings, income deciles 1-5, 2013 100
Table 3.7.c. Increase in net income after an increase of 1 currency unit in gross wage earnings, income deciles 6-10, 2013 101
Table 3.7.d. Increase in net income after an increase of 1 currency unit in gross wage earnings, USD equivalent earnings, 2013 102
Figure 3.7. LAC average: Increase in net income after an increase of 1 currency unit in gross wage earnings, 2013 103
Figure 3.8. LAC average: Increase in net income after an increase of 1 currency unit in labour costs, 2013 103
Table 3.8.a. Increase in net income after an increase of 1 currency unit in gross labour costs, family profiles, 2013 104
Table 3.8.b. Increase in net income after an increase of 1 currency unit in gross labour costs, income deciles 1-5, 2013 105
Table 3.8.c. Increase in net income after an increase of 1 currency unit in gross labour costs, income deciles 6-10, 2013 106
Table 3.8.d. Increase in net income after an increase of 1 currency unit in gross labour costs, USD equivalent earnings, 2013 107
Table 3.9.a. Annual gross wage and net income, single person, 2013 108
Table 3.9.b. Annual gross wage and net income, married couple, 2013 109
Table 3.9.c. Annual gross wage and net income, single person without children, income deciles 1-5, 2013 110
Table 3.9.d. Annual gross wage and net income, single person without children, income deciles 6-10, 2013 111
Table 3.9.e. Annual gross wage and net income, one-earner married couple with two children, income deciles 1-5, 2013 112
Table 3.9.f. Annual gross wage and net income, one-earner married couple with two children, income deciles 6-10, 2013 113
Table 3.10.a. Annual labour costs and net income, single person, 2013 114
Table 3.10.b. Annual labour costs and net income, married couple, 2013 115
Table 3.10.c. Annual labour costs and net income, single person without children, income deciles 1-5, 2013 116
Table 3.10.d. Annual labour costs and net income, single person without children, income deciles 6-10, 2013 117
Table 3.10.e. Annual labour costs and net income, one-earner married couple with two children, income deciles 1-5, 2013 118
Table 3.10.f. Annual labour costs and net income, one-earner married couple with two children, income deciles 6-10, 2013 119
Notes 53
References 53
Chapter 4 Graphical expositionof the 2013 tax burden 121
Argentina 2013: Average tax wedge decomposition 124
Argentina 2013: Marginal tax wedge decomposition 124
Bolivia 2013: Average tax wedge decomposition 125
Bolivia 2013: Marginal tax wedge decomposition 125
Brazil 2013: Average tax wedge decomposition 126
Brazil 2013: Marginal tax wedge decomposition 126
Chile 2013: Average tax wedge decomposition 127
Chile 2013: Marginal tax wedge decomposition 127
Colombia 2013: Average tax wedge decomposition 128
Colombia 2013: Marginal tax wedge decomposition 128
Costa Rica 2013: Average tax wedge decomposition 129
Costa Rica 2013: Marginal tax wedge decomposition 129
Dominican Republic 2013: Average tax wedge decomposition 130
Dominican Republic 2013: Marginal tax wedge decomposition 130
Ecuador 2013: Average tax wedge decomposition 131
Ecuador 2013: Marginal tax wedge decomposition 131
El Salvador 2013: Average tax wedge decomposition 132
El Salvador 2013: Marginal tax wedge decomposition 132
Guatemala 2013: Average tax wedge decomposition 133
Guatemala 2013: Marginal tax wedge decomposition 133
Honduras 2013: Average tax wedge decomposition 134
Honduras 2013: Marginal tax wedge decomposition 134
Jamaica 2013: Average tax wedge decomposition 135
Jamaica 2013: Marginal tax wedge decomposition 135
Mexico 2013: Average tax wedge decomposition 136
Mexico 2013: Marginal tax wedge decomposition 136
Nicaragua 2013: Average tax wedge decomposition 137
Nicaragua 2013: Marginal tax wedge decomposition 137
Panama 2013: Average tax wedge decomposition 138
Panama 2013: Marginal tax wedge decomposition 138
Paraguay 2013: Average tax wedge decomposition 139
Paraguay 2013: Marginal tax wedge decomposition 139
Peru 2013: Average tax wedge decomposition 140
Peru 2013: Marginal tax wedge decomposition 140
Trinidad and Tobago 2013: Average tax wedge decomposition 141
Trinidad and Tobago 2013: Marginal tax wedge decomposition 141
Uruguay 2013: Average tax wedge decomposition 142
Uruguay 2013: Marginal tax wedge decomposition 142
Venezuela 2013: Average tax wedge decomposition 143
Venezuela 2013: Marginal tax wedge decomposition 143
Note 123
PART II Country details 145
Argentina 147
1. Personal income tax system 150
1.1. Central government income tax 150
1.2. State and local taxes 151
2. Compulsory social security contribution to schemes operated within the government sector 151
2.1. Employee contributions 151
2.2. Employer contributions 152
3. Universal cash transfer 152
3.1. Amount for spouse and for dependent children 152
4. Main changes in tax/benefits since 2013 152
5. Memorandum items 152
5.1. Identification of an AW 152
Bolivia 153
1. Personal income tax system 156
1.1. Central government income tax 156
1.2. State and local taxes 157
1.2. State and local taxes 157
2. Compulsory social security contribution to schemes operated within the government sector 157
2.1. Employee contributions 157
2.2. Employer contributions 157
3. Universal cash transfer 158
3.1. Amount for spouse and for dependent children 158
4. Main changes in tax/benefit since 2013 158
5. Memorandum items 158
5.1. Identification of an AW 158
Brazil 159
1. Personal income tax system 162
1.1. Central government income tax 162
2. Compulsory social security contribution to schemes operated within the government sector 163
2.1. Employee contributions 163
2.2. Employer contributions 164
3. Universal cash transfer 164
3.1. Amount for spouse and for dependent children 164
4. Main changes in tax/benefit since 2013 164
5. Memorandum items 164
5.1. Identification of an AW 164
Chile 165
1. Personal income tax system 168
1.1. Central government income tax 168
1.2. State and local taxes 169
2. Compulsory social security contribution to schemes operated within the government sector 169
2.1. Employee contributions 169
2.2. Employer contributions 170
3. Universal cash transfer 170
3.1. Amount for spouse and for dependent children 170
4. Main changes in tax/benefit since 2013 170
5. Memorandum items 170
5.1. Identification of an AW 170
Colombia 171
1. Personal income tax system 174
1.1. Central government income tax 174
1.2. State and local taxes 178
2. Compulsory social security contribution to schemes operated within the government sector 178
2.1. Employee contributions 178
2.2. Employer contributions 179
3. Universal cash transfer 179
3.1. Amount for spouse and for dependent children 179
4. Main changes in tax/benefit since 2013 179
5. Memorandum items 179
5.1. Identification of an AW 179
Costa Rica 181
1. Personal income tax system 184
1.1. Central government income tax 184
1.2. State and local taxes 185
2. Compulsory social security contribution to schemes operated within the government sector 185
2.1. Employee contributions 185
2.2. Employer contributions 185
3. Universal cash transfer 185
3.1. Amount for spouse and for dependent children 185
4. Main changes in tax/benefit since 2013 186
5. Memorandum items 186
5.1. Identification of an AW 186
Dominican Republic 187
1. Personal income tax system 190
1.1. Central government income tax 190
1.2. State and local taxes 191
2. Compulsory social security contribution to schemes operated within the government sector 191
2.1. Employee contributions 191
2.2. Employer contributions 191
3. Universal cash transfer 192
3.1. Amount for spouse and for dependent children 192
4. Main changes in tax/benefit since 2013 192
5. Memorandum items 192
5.1. Identification of an AW 192
Ecuador 193
1. Personal income tax system 196
1.1. Central government income tax 196
1.2. State and local taxes 197
2. Compulsory social security contribution to schemes operated within the government sector 197
2.1. Employee contributions 197
2.2. Employer contributions 197
3. Universal cash transfer 198
3.1. Amount for spouse and for dependent children 198
4. Main changes in tax/benefit since 2013 198
5. Memorandum items 198
5.1. Identification of an AW 198
El Salvador 199
1. Personal income tax system 202
1.1. Central government income tax 202
1.2. State and local taxes 203
2. Compulsory social security contribution to schemes operated within the government sector 203
2.1. Employee contributions 203
2.2. Employer contributions 203
3. Universal cash transfer 203
3.1. Amount for spouse and for dependent children 203
4. Main changes in tax/benefit since 2013 204
5. Memorandum items 204
5.1. Identification of an AW 204
Guatemala 205
1. Personal income tax system 208
1.1. Central government income tax 208
1.2. State and local taxes 209
2. Compulsory social security contribution to schemes operated within the government sector 209
2.1. Employee contributions 209
2.2. Employer contributions 209
3. Universal cash transfer 210
3.1. Amount for spouse and for dependent children 210
4. Main changes in tax/benefit since 2013 210
5. Memorandum items 210
5.1. Identification of an AW 210
Honduras 211
1. Personal income tax system 214
1.1. Central government income tax 214
1.2. State and local taxes 215
2. Compulsory social security contribution to schemes operated within the government sector 215
2.1. Employee contributions 215
2.2. Employer contributions 215
3. Universal cash transfer 215
3.1. Amount for spouse and for dependent children 215
4. Main changes in tax/benefit since 2013 216
5. Memorandum items 216
5.1. Identification of an AW 216
Jamaica 217
1. Personal income tax system 220
1.1. Central government income tax 220
1.2. State and local taxes 221
2. Compulsory social security contribution to schemes operated within the government sector 221
2.1. Employee contributions 221
2.2. Employer contributions 221
3. Universal cash transfer 221
3.1. Amount for spouse and for dependent children 221
4. Main changes in tax/benefit since 2013 222
5. Memorandum items 222
5.1. Identification of an AW 222
Mexico 223
1. Personal income tax system 226
1.1. Central government income tax 226
1.2. State and local taxes 228
2. Compulsory social security contribution to schemes operated within the government sector 228
2.1. Employee contributions 228
2.2. Employer contributions 228
3. Universal cash transfer 229
3.1. Amount for spouse and for dependent children 229
4. Main changes in tax/benefit since 2013 229
5. Memorandum items 229
5.1. Identification of an AW 229
Note 229
Nicaragua 231
1. Personal income tax system 234
1.1. Central government income tax 234
1.2. State and local taxes 235
2. Compulsory social security contribution to schemes operated within the government sector 235
2.1. Employee contributions 235
2.2. Employer contributions 235
3. Universal cash transfer 235
3.1. Amount for spouse and for dependent children 235
4. Main changes in tax/benefit since 2013 236
5. Memorandum items 236
5.1. Identification of an AW 236
Panama 237
1. Personal income tax system 240
1.1. Central government income tax 240
1.2. State and local taxes 241
2. Compulsory social security contribution to schemes operated within the government sector 241
2.1. Employee contributions 241
2.2. Employer contributions 241
3. Universal cash transfer 242
3.1. Amount for spouse and for dependent children 242
4. Main changes in tax/benefit since 2013 242
5. Memorandum items 242
5.1. Identification of an AW 242
Paraguay 243
1. Personal income tax system 246
1.1. Central government income tax 246
1.2. State and local taxes 247
2. Compulsory social security contribution to schemes operated within the government sector 247
2.1. Employee contributions 247
2.2. Employer contributions 247
3. Universal cash transfer 247
3.1. Amount for spouse and for dependent children 247
4. Main changes in tax/benefit since 2013 247
5. Memorandum items 247
5.1. Identification of an AW 247
Peru 249
1. Personal income tax system 252
1.1. Central government income tax 252
1.2. State and local taxes 253
2. Compulsory social security contribution to schemes operated within the government sector 253
2.1. Employee contributions 253
2.2. Employer contributions 253
3. Universal cash transfer 253
3.1. Amount for spouse and for dependent children 253
4. Main changes in tax/benefit since 2013 254
5. Memorandum items 254
5.1. Identification of an AW 254
Trinidad and Tobago 255
1. Personal income tax system 258
1.1. Central government income tax 258
1.2. State and local taxes 259
2. Compulsory social security contributions 259
2.1. Employee and employer contributions 259
3. Universal cash transfer 260
3.1. Amount for spouse and for dependent children 260
4. Main changes in tax/benefit since 2013 260
5. Memorandum items 260
5.1. Identification of an AW 260
Uruguay 261
1. Personal income tax system 264
1.1. Central government income tax 264
1.2. State and local taxes 265
2. Compulsory social security contributions 265
2.1. Employee contributions 265
2.2. Employer contributions 265
3. Universal cash transfer 266
3.1. Amount for spouse and for dependent children 266
4. Main changes in tax/benefit since 2013 266
5. Memorandum items 266
5.1. Identification of an AW 266
Venezuela 267
1. Personal income tax system 270
1.1. Central government income tax 270
1.2. State and local taxes 271
2. Compulsory social security contributions 271
2.1. Employee contributions 271
2.2. Employer contributions 272
3. Universal cash transfer 272
3.1. Amount for spouse and for dependent children 272
4. Main changes in tax/benefit since 2013 272
5. Memorandum items 272
5.1. Identification of an AW 272
Note 272
Annex Methodology and limitations 273
I. Methodology 273
1. Introduction 273
2. Taxpayer characteristics 274
3. The range of industries covered 274
Table A.1. Terminology 274
Table A.2. Characteristics of taxpayers 275
Table A.3. International standard industrial classification of all economic activities 275
4. Defining gross wage earnings 275
Table A.4. Source of earnings data, 2013 276
5. Calculating average gross wages and wage earnings by decile of income 277
Table A.5. Estimated gross wage earnings, 2013 (in thousands of national currency) 277
Table A.6. Purchasing power parities and exchange rates for 2013 278
6. Coverage of taxes and benefits 278
7. Calculation of personal income taxes 279
8. Social security contributions 279
9. Payroll taxes 279
10. Family and cash benefits from the general government 280
11. Payable tax credits 280
12. The calculation of the marginal tax rates 281
II. Limitations 281
1. General limitations 281
2. Some specific limitations on the income tax calculation 282
Notes 282
References 282
Chapter 1. Overview
This chapter presents the main results of the analysis of the taxation of labour income for twenty economies in Latin America and the Caribbean in 2013. Most emphasis is given to the tax wedge – a measure of the difference between labour costs to the employer and the corresponding net take-home pay of the employee – which is calculated by expressing the sum of personal income tax, employee plus employer contributions together with any payroll tax minus benefits as a percentage of labour costs. The calculations also focus on the net personal average tax rate. This is the term used when the percentage income tax and employee social security contributions net of cash benefits are expressed as a percentage of gross wage earnings. In this Report, the methodology used to estimate the tax wedges is based on the compulsory payments methodology;
-
The deductions from labour income (referred to in this Report as taxes) are defined as personal income tax, employee and employer social security contributions (paid either to general government or privately managed funds) and payroll taxes less cash transfers.
-
Labour costs are defined as the sum of gross wage earnings, employers social security contributions (paid either to general government or privately managed funds) and payroll taxes.
A more detailed description of the methodology is set out in the Annex. The key results focus on the single worker with no children on average earnings and include a comparison with the single married couple earner with two children. The analysis includes a review of how tax wedges vary across the income distribution.
1. Introduction
This Report provides unique information for each of twenty Latin American and Caribbean (LAC) countries on the income taxes paid by workers, their social security contributions, the family benefits they receive in the form of cash transfers as well as the social security contributions and payroll taxes paid by their employers.
The Report focuses on full-time employees in the formal sector assuming that their only source of income is derived from wage earnings. Additional assumptions are made regarding the personal circumstances of individuals to estimate their tax/benefit position. The results focus solely on taxes applied to wage earnings. Other forms of taxation due on non-wage income as well as taxes on consumption or net wealth are not taken into account. The cash benefits included are paid by general government as cash transfers, usually in respect of children in the household.
The Report presents several measures of taxation on labour. Most emphasis is given to the tax wedge – a measure of the difference between the total labour cost to the employer and the corresponding take-home-pay of the employee. The tax wedge is calculated by expressing the sum of personal income taxes, all compulsory social security contributions paid by employee and employers – both to the public and private sector – and payroll taxes, minus cash benefits as a percentage of the total labour cost. Employer social security contributions and – in some cases – payroll taxes are added to the wage earnings1 to determine the amount of the total labour cost. The average tax wedge identifies the percentage of the labour cost which encompasses all compulsory taxes and social security contributions, net of cash benefits. Similarly, the marginal tax wedge measure identifies the share of these levies on an additional unit of labour cost.
The Report models the resulting tax wedge on different percentages of the average wage earnings, income distributions ordered by decile and annual fixed sums expressed in USD of full-time employed adults. The estimated earnings figures, which cover all industries within the productive sectors of Latin American and Caribbean economies, are derived from responses to representative national household income surveys. It should be recognised that the associated measures of total labour cost may, in some cases, be less that the actual labour costs incurred by employers as they can also willingly provide other monetary incentives and in-kind benefits to their employees.
The analysis also focuses on net personal average tax rates. This is the term used when the personal income tax and employee social security contributions net of cash benefits is expressed as a percentage of the annual gross wage earnings. The net personal marginal tax rate shows the share of an additional unit of income that is paid on taxes and employee social security contributions net of cash benefits.
The tax data and tax calculations relate to the calendar year of 2013. In Chile, the model is based on the Budget Law 2014 (voted in December 2013 and applied on income earned in 2013).
2. Review of results for 2013
2.1. Tax wedge
Table 1.1 describes the composition of the tax wedge between the total labour costs to the employer and the corresponding net take-home pay for a single individual without children earning the average wage. It also shows the estimated labour costs in both USD and dollars with equivalent purchasing power.
Argentina has the highest tax wedge at 34.6% of labour costs. Brazil, Uruguay and Colombia also have figures of 30% or more. Honduras had the lowest tax wedge at 10% with Guatemala and Trinidad and Tobago also having figures below 15%. The average tax wedge in the LAC countries was 21.7%. Mexico was the only country where workers pay personal income tax at the average wage level.
Compulsory social security contributions paid by the employee as a percentage of labour costs were highest in Chile at 18.2% followed by Uruguay (15.3%) and Argentina (13.4%). The lowest percentages were in Mexico (2.0%) and Honduras (3.4%).
| Table 1.1. Composition of the total tax wedge, 2013 |
|---|
| As % of labour costs |
|---|
| Country1 | Total Tax Wedge2 | Income Tax | Social Security Contributions | Labour Costs |
|---|
| Employee | Employer | USD | PPP3 |
|---|
| Argentina | 34.6 | 0.0 | 13.4 | 21.2 | 26 155 | 40 380 |
| Brazil | 32.2 | 0.0 | 6.7 | 25.5 | 14 125 | 18 992 |
| Uruguay | 30.5 | 0.0 | 15.3 | 15.2 | 14 877 | 17 188 |
| Colombia | 30.0 | 0.0 | 5.3 | 24.7 | 9 915 | 15 774 |
| Costa Rica | 28.0 | 0.0 | 7.3 | 20.7 | 14 419 | 19 468 |
| Mexico | 26.9 | 7.0 | 2.0 | 17.9 | 9 438 | 15 477 |
| Panama | 22.9 | 0.0 | 9.9 | 13.0 | 10 573 | 18 615 |
| Chile | 22.6 | 0.0 | 18.2 | 4.4 | 13 949 | 20 009 |
| Bolivia | 21.6 | 0.0 | 9.3 | 12.3 | 6 599 | 14 257 |
| Paraguay | 20.9 | 0.0 | 7.8 | 13.0 | 9 322 | 17 943 |
| El Salvador | 20.5 | 0.0 | 7.7 | 12.8 | 6 084 | 12 341 |
| Nicaragua | 19.2 | 0.0 | 4.9 | 14.3 | 3 739 | 9 613 |
| Dominican Republic | 19.2 | 0.0 | 5.1 | 14.1 | 6 291 | 13 049 |
| Ecuador | 18.5 | 0.0 | 8.5 | 10.0 | 8 893 | 16 169 |
| Peru | 17.5 | 0.0 | 10.1 | 7.4 | 6 771 | 12 085 |
| Venezuela | 17.4 | 0.0 | 4.8 | 12.6 | 9 925 | 15 682 |
| Jamaica | 16.6 | 0.0 | 6.0 | 10.7 | 4 088 | 6... |
| Erscheint lt. Verlag | 26.9.2016 |
|---|---|
| Sprache | englisch |
| Themenwelt | Recht / Steuern ► Steuern / Steuerrecht |
| Recht / Steuern ► Wirtschaftsrecht | |
| Wirtschaft ► Betriebswirtschaft / Management ► Finanzierung | |
| Wirtschaft ► Volkswirtschaftslehre ► Wirtschaftspolitik | |
| ISBN-10 | 92-64-26504-X / 926426504X |
| ISBN-13 | 978-92-64-26504-2 / 9789264265042 |
| Haben Sie eine Frage zum Produkt? |
EPUB (Adobe DRM)Kopierschutz: Adobe-DRM
Adobe-DRM ist ein Kopierschutz, der das eBook vor Mißbrauch schützen soll. Dabei wird das eBook bereits beim Download auf Ihre persönliche Adobe-ID autorisiert. Lesen können Sie das eBook dann nur auf den Geräten, welche ebenfalls auf Ihre Adobe-ID registriert sind.
Details zum Adobe-DRM
Dateiformat: EPUB (Electronic Publication)
EPUB ist ein offener Standard für eBooks und eignet sich besonders zur Darstellung von Belletristik und Sachbüchern. Der Fließtext wird dynamisch an die Display- und Schriftgröße angepasst. Auch für mobile Lesegeräte ist EPUB daher gut geeignet.
Systemvoraussetzungen:
PC/Mac: Mit einem PC oder Mac können Sie dieses eBook lesen. Sie benötigen eine
eReader: Dieses eBook kann mit (fast) allen eBook-Readern gelesen werden. Mit dem amazon-Kindle ist es aber nicht kompatibel.
Smartphone/Tablet: Egal ob Apple oder Android, dieses eBook können Sie lesen. Sie benötigen eine
Geräteliste und zusätzliche Hinweise
Buying eBooks from abroad
For tax law reasons we can sell eBooks just within Germany and Switzerland. Regrettably we cannot fulfill eBook-orders from other countries.
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