Emory International Law Review


In the past decades, there has been a proliferation of non-income levies throughout Latin America designed to stimulate collections. Tax administrators favor them for being easier to enforce as compared to traditional taxes on net income, as well as harder to evade.

To make sense of the rather dysfunctional conglomeration of levies, this Article proposes a classification into three broad categories: (1) taxes on revenues; (2) alternative levies on income and assets, whether on a gross or net basis, along with taxes on net equity; and finally (3) transactional-type levies such as stamp taxes, export duties, remittance taxes, and registration assessments, not to mention the wide spectrum of solidarity contributions. Not only are non-income taxes sanctioned at the national or federal level covered, but also those implemented by provincial, state, or municipal governments.

Limitations as to the creditability and deductibility of these diverse levies increase the overall tax burden multinationals frequently face. Constitutional challenges raised by taxpayers, especially those surrounding alternative taxes on assets and temporary contributions, provide insight as to why judges often hold that the principles of fiscal equity and/or taxpayers’ economic capacity to pay are violated.

The Article concludes by calling for an overhaul of tax systems in Latin America by abolishing most of the cumbersome and ineffective levies on revenues, assets, and wealth. In exchange, policymakers should focus on framing a simpler and more robust national corporate income tax regime with less exemptions, deductions, and credits, which fully embraces the financial capability of taxpayers.