Tax Reforms and Tax Compliance: The Divergent Paths of Chile and Argentina
This article compares the effects of tax reform on tax compliance in Argentina and Chile. After constructing three different comparative indexes of tax compliance, it proposes a comprehensive approach, which includes political, economic and sociological explanations to address the different behaviour of taxpayers in each country. It concludes that Chile was able to enhance better tax compliance because it has implemented a permanent, stable and rational policy that allowed for the development of an effective tax administration – a process never fully accomplished in Argentina. Tax reforms may enhance better compliance only after they reverse the entrenched evasion strategies of the taxpayers.