Legal and tax variables and their impact on business creation in latin america
https://orcid.org/0000-0001-7303-5923
This paper analyzes the impact of legal and tax variables on business creation in Latin America, with a particular focus on Colombia. The study examines five key dimensions of the business environment: time required to start a business, number of administrative procedures, number of tax payments, total tax rate, and time required for tax compliance. A quantitative descriptive-comparative approach is adopted, using secondary data obtained from international sources, particularly the World Bank. The results indicate that Colombia has made significant progress insimplifying administrative processes related to business creation, as reflected in the reduction of time and procedures required. However, these improvements are constrained by the persistence of a relatively high tax burden, which exceeds that of comparable economies in the region, negatively affecting business competitiveness and discouraging formalization. The comparative analysis shows that countries with more efficient tax structures and lower fiscal burdens provide more favorable conditions for business development. In this regard, the study concludes that institutional efficiency should not be assessed solely in terms of regulatory simplification, but rather in terms of the coherence between administrative and fiscal policies. Finally, the need for comprehensive reforms aimed at balancing ease of doing business and fiscal sustainability is highlighted as a key factor for strengthening competitiveness and economic growth in the region.
Coase, R. H. (1937). The nature of the firm. Economica, 4(16), 386–405.
De Soto, H. (2000). El misterio del capital. Fondo de Cultura Económica.
Djankov, S., La Porta, R., López-de-Silanes, F., & Shleifer, A. (2002). The regulation of entry. The Quarterly Journal of Economics, 117(1), 1–37.
Feldstein, M. (1995). The effect of marginal tax rates on taxable income. Journal of Political Economy, 103(3), 551–572.
Joshi, A., Prichard, W., & Heady, C. (2014). Taxing the informal economy. The Journal of Development Studies, 50(10), 1325–1347.
Loayza, N., Servén, L., & Sugawara, N. (2009). Informality in Latin America and the Caribbean. World Bank.
La Porta, R., & Shleifer, A. (2014). Informality and development. Journal of Economic Perspectives, 28(3), 109–126.
Loayza, N. V. (2016). Informality in the process of development and growth. World Bank.
North, D. C. (1990). Institutions, institutional change and economic performance. Cambridge University Press.
Nagac, K. (2015). Tax system and informal economy: A cross-country analysis. Applied Economics, 47(17), 1775–1787.
Medina, L., & Schneider, F. (2019). Shadow economies around the world. IMF Working Paper.
Mathias, B., Lux, S., Crook, R., Autry, C., & Zaretzki, R. (2015). Competing against the informal economy. Journal of Business Ethics, 127(2), 241–264.
Organisation for Economic Co-operation and Development (OECD). (2019). Revenue statistics in Latin America and the Caribbean. OECD Publishing.
Perry, G., Maloney, W., Arias, O., Fajnzylber, P., Mason, A., & Saavedra-Chanduvi, J. (2007). Informality: Exit and exclusion. World Bank.
Schneider, F. (2005). Shadow economies around the world: What do we really know? European Journal of Political Economy, 21(3), 598–642.
Ulyssea, G. (2020). Informality: Causes and consequences for development. Annual Review of Economics, 12, 525–546.
Villegas Mayorga, J. (2021). Criterios jurisprudenciales y doctrinales sobre las conceptualizaciones de normalidad y necesidad en las deducciones en la ley de impuesto sobre la renta vigente. Enfoque Disciplinario, 6(1), 42-58. https://doi.org/10.70165/enfdis.v6i1.279