Journal of Finance and Accountancy Tax compliance in Latin, Page 1 Tax compliance in Latin America: a cross country analysis.

This paper examines the role that culture plays in the tax compliance process. Public finance is dependent upon taxpayers complying with tax laws. Cultures differ in many respects but do those differences result in materially different rates of tax compliance as well? In other words, are some cultures more law abiding than others – at least with respect to tax law? This paper will address that question. Its objective is to test the hypothesis that certain aspects of a nation’s culture impact the level of tax evasion within that country. More specifically, do countries with lower levels of compliance with laws in general also experience lower levels of tax compliance or, in other words greater rates of tax evasion? Tests conducted utilizing ordinary least squares regression indicate that countries with lower levels of complying with laws in general do indeed experience lower levels of tax compliance