Resumen

Accurate measurement of income inequality remains a critical challenge in developing economies, particularly due to the underreporting of top incomes in traditional household surveys. In Colombia, while previous research has improved income measurement through tax records, these approaches fail to capture undistributed corporate profits that constitute a significant portion of top earners’ economic resources. This study addresses this limitation by employing Colombia’s Beneficial Ownership Registry (BOR), a novel administrative dataset linking corporate entities to their ultimate individual beneficiaries. I assess the BOR’s strengths in revealing ownership transparency and its limitations. Building on this foundation, I develop a economic income measure that allocates undistributed corporate profits to individuals, revealing that incomes of the top 0.01% nearly double when these profits are included. Extending this framework to effective tax rates (ETRs) shows that ETRs increase throughout the personal income distribution, while the overall shape of the ETR profile remains unchanged. In particular, effective tax rates continue to decline at the very top of the distribution. Thus, corporate taxes act as a partial backstop by raising effective tax rates throughout the distribution, even though the regressive pattern at the very top persists. Finally, comparisons with France and Brazil highlight similar regressive patterns and the potential of administrative datasets like the BOR to enhance fiscal transparency and equitable tax policy.