Fiscal reform in Honduras: progressive fiscal and revenue policy guidelines with articulation to social policy

Abstract

When analyzing the evolution of the Fiscal Policy in Honduras in the last three decades, it is observed that even with the efforts to increase tax collection, through the modernization of the tax system and multiple reforms promoted by the financial authorities, the reality is that the levels of collection are kept at low averages and consequently the level of social development remains limited, which is evident when analyzing all the variables considered in the international agency studies compared on the level of tax collection and the social programs supported by these. With the current collection levels, public finances constantly suffer the risk of facing financial problems to solve their obligations to citizens. The issue of the need for reform of the Honduran tax system has been very frequent in the analysis of the Honduran economy. However, in order to make a good tax reform proposal, it is essential to understand the context in which it is located and thereby determine why it is necessary to reform the Honduran tax system.