Taxes and state-building. Guatemala: compliance and impunity.

• In Event: Política fiscal, poder y estado en Centroamérica. Perspectivas globales, regionales y nacionales.

Abstract

This paper explores how the ‘interaction between state and society’ is limited and mainly expressed through the economic elite – state interaction in Guatemala. The elites’ power, protected among other mechanisms by the political system and its financial electoral rules, shape a specific tax regime rooted in exemptions and exclusions. These characteristics of the tax rules contribute to the creation of a system of impunity and transgressions of the fiscal rules, resulting in limited compliance and tax evasion. Furthermore, all these mechanisms allow the system to reproduce itself, in a vicious circle, preventing effective and more redistributive tax reforms.

Author

• Anisia Paola Ortiz Loaiza, University of Ottawa