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Revealing 21% of GDP in Hidden Assets : Evidence from Argentina

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  • Londoño-Vélez,Juliana
  • Tortarolo,Dario

Abstract

Despite substantial offshore tax evasion, Argentines disclosed assets worth 21 percent of GDP under a tax amnesty in 2016. This paper studies how enforcement initiatives impact individuals' tax behavior, tax progressivity, and revenue collection. Offshore tax evasion is concentrated among the wealthiest 0.1 percent of adults. Tax compliance improved, expanding the tax bases for both wealth tax and capital income tax, especially at the top. The subsequent tax hike on foreign assets in 2019 boosted tax progressivity, raising the effective tax rate for the wealthiest 0.1 percent of adults, and established Argentina's wealth tax as one of the most successful globally in revenue generation.

Suggested Citation

  • Londoño-Vélez,Juliana & Tortarolo,Dario, 2023. "Revealing 21% of GDP in Hidden Assets : Evidence from Argentina," Policy Research Working Paper Series 10639, The World Bank.
    • Handle: RePEc:wbk:wbrwps:10639
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    References listed on IDEAS

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    4. Bosch, Mariano & Guajardo, Jarret, 2012. "Labor Market Impacts of Non-Contributory Pensions: The Case of Argentina's Moratorium," IDB Publications (Working Papers) 4094, Inter-American Development Bank.
    5. Mariano Bosch & Jarret Guajardo, 2012. "Labor Market Impacts of Non-Contributory Pensions: The Case of Argentina's Moratorium," IDB Publications (Working Papers) 78158, Inter-American Development Bank.
    6. Joel Slemrod, 2019. "Tax Compliance and Enforcement," Journal of Economic Literature, American Economic Association, vol. 57(4), pages 904-954, December.
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