Financial Education - South American tax legislation and tax culture of taxpayers

According to the topic developed in my previous post, the tax authorities - taxpayer relationship is hindered by the lack of tax culture of taxpayers regarding the importance of compliance with the duties enshrined in the tax regulations, which basically in general terms state that everyone has the duty to contribute to public expenditures by paying taxes, fees and contributions established by law.

Now, in the case of South American countries with respect to parafiscal contributions, in most of the states there are certain difficulties related to their collection level, due to the lack of tax culture of the taxpayers of the entity with respect to compliance with this type of tax, which are also coercive and have relevance for their adhesion due to the linkage of such levies with state activities of general benefit.

Since their payment is made when the law requires it to be made to an entity other than the tax entity, without this representing a consideration or possibility of any consideration whatsoever. Parafiscal contributions are levies collected by certain public entities to ensure their autonomous financing, which is made up of employer and worker contributions to funds that grant benefits to employees, employer contributions to funds that grant benefits and contributions from independent workers, among others.

In line with the above, parafiscal contributions do not represent any type of consideration, since they are not collected by the state tax administration and therefore do not enter the national treasury; in other words, the proceeds are not included in the state budget, but go directly to the entities or funds that collect them.

These institutions are oriented to the financial attention of certain specific sectors, such as the social security field, which together with the rest of the taxes must respond to an efficient management to meet the multiple needs of the citizens.