Bank Debit Taxes in Latin America - An Analysis of Recent Trends (Electronic book text)

In the last 13 years, a number of Latin American countries have resorted to the use of new financial transactions taxes in order to raise revenue. These taxes have been imposed on banking transactions, mainly on debits. First introduced in Argentina in 1983, this type of tax was reintroduced there in 1988 and 2001, and implemented in Peru (1989), Brazil (1994 and 1997), Venezuela (1994 and 1998), Colombia (1998), and Ecuador (1999) (Figure 1). These taxes can be seen in the context of a larger spectrum of "financial transactions taxes," the provenance of which stems back hundreds of years to documentary stamp duties in Europe, and includes more modern securities transfer taxes as well as theoretical "Tobin" type taxes on currency exchanges.2 This paper will not, however, look at financial transactions taxes in general,3 but will focus more narrowly on domestic, revenue-oriented, bank debit taxes in the context of Latin America.4