While describing the Value Added Tax (VAT) as a regressive and high tax in Latin America and the Caribbean, the World Bank has suggested that some Central American countries could increase income tax in an effort “to avoid growth rate challenges”.This was highlighted on Tuesday by the World Bank’s Chief Economist for Latin America and the Caribbean William Maloney, as he discussed aspects of the Caribbean Economic Review, New Approaches to Closing the Fiscal Gap.The literature suggests that there was room for increases in the VAT in those Latin America and Caribbean countries “with low initial VAT rates”.
