Falling inequality and the growing capital income share: Reconciling divergent trends in survey and tax data

•Based on a unique array of administrative records and household survey microdata, we provide detailed evidence on inequality trends for the recent period of survey-based inequality reduction in Uruguay (2009–2016).•Inequality trends are sensitive to the data source and inequality measure.•Synthetic indices decreased, but the top 1% and 0.1% income shares fell in household survey data, whereas in the corrected administrative data, they remained steady and even increased in 2016.•Differences result from increasing inequality in the upper tail of administrative data, mainly driven by a growing share of capital income and particularly dividends.•The probability of reaching top income positions is higher for men, liberal professionals, capital income receivers, and occupations associated to health services.