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Argentine Provinces derive some 26 percbnt of their total receipts from taxes of similar nature. In Mexico, where they are collected by the Federal Government, they represent the mainstake (63 percent) of State budgets after revenue sharing.

4.06 The main advantage of this category of taxes is that they are indirect and, remaining implicit in the purchase price of the goods and services, they are the least conducive to grassroots resistance. However, because their basic incidence is on general consumption, they tend to be regressive, which leads many LAC governments to exempt staple food items from this form of taxation. Where the tax has been converted into a value added tax (as in Brazil), most of the revenue tends t:o accrue to the jurisdictions which produce the goods and services and are the most industrialized and urbanized. Otherwise, they tend to shift the fiscal burden to the place of purchase rather than to that of consumption. A buoyant sub-category of these taxes are those on vehicle ownership, circulation and motor fue.s, which are of special significance to urbanized areas, where automobile usage is more intensive, especially among social groups with higher incomes. However, problems of registration arise for these as for all taxes on goods and service, which are difficult to apply in small municipalities, where an adequate census of local activities is lacking, and in metropolitan areas, because of the existence of a large informal sector, which does not appear in the fiscal records.

4.07 Taxes on Propertv. A second group of taxes is considered suitable for subnational use in practically all LAC countries, because they raise no issue of horizontal double-imposition.311 These are the taxes on the property of land or real estate, on individual or corporate wealth and on capital transactions, inheritance or bequest. In theory, they would permit partial recovery of the public costs of urbanization, and could represent a buoyant source of revenue for rapidly growing cities without discouraging private development. In practice, a variety of structural reasons impede effective use of these instruments: first, LAC countries have little tradition of direct imposition and the very local and direct nature of the property taxes makes public officials the immediate targets of complaints from a large number of contributors; second, the fact that they are mostly levied on residential property makes them appear as levies on housing consumption, suggesting a regressive distribution of the fiscal burden; third, use of property taxation implies the hurdles of establishing a cadastre of the properties, (which means sorting out the peculiarities of tenure), keeping records up to date, establishing an assessment system and collecting the corresponding levies, all of which entails considerable

- II/ Double imposition, i.e., the possibility that different fiscal authorities may tap the same tax base (either vertically or horizontally) is a traditional subject of debate among Latin American experts who have constantly argued for a rigid separation of sources. Jorge Macon offers a more balanced view in his essay: Federalismo y Decentralizacion Fiscal en Lotinoamerica, CIEDIA, Buenos Aires, 1987.