Americas Tax policy outlook

The outlook for global tax policy in 2013

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The group of 18 Americas countries within this report is very mixed, with few strong policy trends pervading the region.

While the overall economic performance of the region is broadly similar to Asia-Pacific, the Americas finds itself on a policy track where (across corporate, personal and indirect taxes) anticipated tax burden increases outnumber anticipated decreases in 2013 by a factor of more than four to one.

Following underlying trends elsewhere, indirect taxes are the most popular way to increase revenues, according to our responders. Although increases outnumber decreases, the majority of Americas countries are projected to remain in a holding pattern in 2013, continuing to repair annual deficits (only 2 of the 18 delivered a surplus in 2011, the last year for which actual data is available) by maintaining the tax burden where it was in 2012.

More than half of the responses across all tax types note anticipated changes this year.

Anticipated changes in tax burden in Americas countries

Tax type Increase in burden in 2013 Decrease in burden in 2013 No change in burden in 2013 Total countries  levying tax type*
CIT 5 2 11 18
PIT 5 3 10 18
VAT/GST/sales tax 7 2 9 18
Total for all tax types 17 7 30

*Countries covered in this report

The Americas political landscape

There is much to watch on the Americas political horizon in 2013. Most recently, of course, the death of Venezuela’s Hugo Chavez has propelled the country into a bitter April snap election. Whatever the result, and bearing in mind some of the rhetoric around taxation in last year’s election, Venezuela is one jurisdiction to watch.

In Chile, meanwhile, there will be Presidential elections in December and tax will likely be a central topic for all candidates as the country demands more government services and the longer term policy goal of a balanced budget is pursued.

While not a presidential election year, 2013 will see elections for legislative office in Argentina in which one-third of both houses of parliament will be replaced. Nicaragua, like many other countries in the region, has a raft of ongoing tax proposals in play, including in the areas of transfer pricing, telecommunications taxation and customs duties.

Of course, 2013 will be another important year for tax in the US, with focus on sequestration, the possible extension of business and tax provisions set to expire at year-end, the continuing international tax reform debate and preparation for the key provisions of the Affordable Care Act, which will go into effect in 2014.