In a concluding statement released last Friday in El Salvador, the conference, which included IMF staff, regional banking sector officials and finance ministers, noted that tax structures in the region had already evolved substantially in recent years.

"Conference participants took note of the international experience in protecting tax revenue in the face of globalization to maintain acceptable levels of public expenditure," the statement explained.

Finance ministers emphasized that, at the regional level, a number of steps had been taken to strengthen regional collaboration on tax issues, including through systematic exchanges of information, an inventory of investment incentives, rules on transfer pricing and thin capitalization, and a model of double taxation treaty.

The conference also discussed other key policy issues facing the region, namely the implications of the global shocks, the benefits and challenges of the increasing presence of large foreign banks.

"While the region has so far been resilient, participants noted that the growth outlook will continue to be affected by developments in the United States, where the slowdown is likely to be protracted. This said, they emphasized that macroeconomic policies should be focused on containing inflation, as pressures from higher commodity prices presently dominated any possible impact from weaker growth. In this context they stressed that higher inflation affected the population, especially the poor. In particular, participants underscored that monetary policy should be focused on limiting second-round price effects and anchoring inflation expectations," the statement said.

"Conference participants welcomed the increased presence of global banks in Central America. They emphasized that large global banks are likely to contribute to the dissemination of international standards in terms of capitalization, risk management, and corporate governance, and could generate greater competition in the provision of financial services. But they also highlighted that these developments pose new challenges for supervisors. They could also generate more volatile capital flows and help fuel credit booms. Financial sector superintendents indicated that they would continue improving consolidated supervision of regional and global banks and further strengthen cooperation among regional supervisors—among others—by establishing a permanent executive secretariat," the statement added.