Con­struct­ing fis­cal covenants and the im­por­tance of main­tain­ing sta­ble eco­nom­ic growth are two key fac­tors in in­creas­ing tax in­come and im­prov­ing equal­i­ty, ac­cord­ing to ex­perts who met at the ECLAC head­quar­ters in San­ti­a­go, Chile, at the 25th Re­gion­al sem­i­nar on fis­cal pol­i­cy.

The meet­ing, or­gan­ised by the Eco­nom­ic Com­mis­sion for Latin Amer­i­ca and the Caribbean (ECLAC) with the sup­port of the In­ter­na­tion­al Mon­e­tary Fund (IMF), the World Bank, the In­ter-Amer­i­can De­vel­op­ment Bank (IDB) and the Or­gan­i­sa­tion for Eco­nom­ic Co-op­er­a­tion and De­vel­op­ment (OECD), is be­ing at­tend­ed by the Min­is­ters of Fi­nance of Chile, El Sal­vador and Uruguay, as well as by renowned in­ter­na­tion­al ex­perts.

The meet­ing was opened by Ali­cia B�rce­na, Ex­ec­u­tive Sec­re­tary of ECLAC, who em­pha­sized the im­por­tance of the sem­i­nar, which af­ter 25 years has be­come an es­sen­tial ref­er­ence point in dis­cus­sions of the re­gion's eco­nom­ic and fis­cal sit­u­a­tion.B�rce­na said: "In or­der to achieve equal­i­ty - which is an eth­i­cal guide­line and a strate­gic vi­sion for our re­gion's present and fu­ture de­vel­op­ment–we need a new re­la­tion­ship be­tween the State, mar­ket and so­ci­ety in­clud­ing fis­cal and so­cial covenants."

The Ex­ec­u­tive Sec­re­tary of this UN Com­mis­sion added: "In this sphere, fis­cal pol­i­cy plays a cru­cial role and the clear aims of fis­cal covenants must be to: in­crease tax rev­enues by mak­ing them pro­gres­sive, re­duce eva­sion and in­crease the cap­ture of in­come from nat­ur­al re­sources."The Fi­nance Min­is­ter of Chile, Fe­lipe Lar­ra�n, gave a pre­sen­ta­tion at the open­ing cer­e­mo­ny that stressed the rel­e­vance of eco­nom­ic growth as the main source of col­lect­ing fis­cal rev­enues.

He said "tax re­form helps col­lec­tion, but it is not the on­ly fac­tor. The State can col­lect much more if it has sus­tained and pow­er­ful growth".Fi­nance Min­is­ter of Sal­vador, Car­los C�ceres, ex­plained the var­i­ous tax re­forms im­ple­ment­ed in his coun­try in re­cent years. While he agreed that growth was im­por­tant for achiev­ing good lev­els of col­lec­tion, he al­so high­light­ed the need for oth­er in­stru­ments such as mon­e­tary pol­i­cy and sup­port from mul­ti­lat­er­al in­sti­tu­tions to achieve so­cial tar­gets.