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  3. Chile Says VAT Evasion Reached 25.2 Percent Last Year

Chile Says VAT Evasion Reached 25.2 Percent Last Year

by Mike Godfrey, Tax-News.com, Washington

23 December 2014


Value-added tax (VAT) evasion in Chile reached about USD7.3bn last year, accounting for 25.2 percent of potential VAT revenue, according to a study conducted by the Internal Revenue Service (SII).

In 2003, the earliest year included in the study, VAT evasion amounted to USD1.3bn, accounting for 18 percent of potential revenue.

The Government recently approved a tax reform package which aims to lift tax revenue by three percent of gross domestic product (GDP) annually through measures such as a hike in the corporate tax rate. The reform includes measures to tackle tax evasion which are expected to raise revenue by 0.52 percent of GDP.

The SII pointed out that it has been working since March to modernize the administration of taxes in order to boost compliance.

The additional revenue generated by the tax reform will be used to provide free education for all, and to fund other social projects.

TAGS: compliance | tax | economics | value added tax (VAT) | tax compliance | Chile | gross domestic product (GDP) | tax reform | Tax | Tax Evasion

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