The OECD has published the revenue statistics for Latin American and Caribbean countries. The report entitled Revenue Statistics in Latin America and the Caribbean was produced by the Inter-American Centre of Tax Administration (CIAT), the Economic Commission for Latin America and the Caribbean (ECLAC) and the OECD and covers 22 countries in the region.
The report shows that the average tax to GDP ratio in these countries rose from 21.5% in 2013 to 21.7% in 2014. Despite the slightly improved revenue collection the tax to GDP ratio is still well below the average of 34.4% for OECD countries. This gap is partly due to a larger informal economy in the region and partly due to the higher tax breaks. There is scope for further broadening of the tax base and further modernization of tax policy and administration.
The tax to GDP ratio varies across countries of the region with Argentina and Brazil having ratios of 32.2% and 33.4% respectively while some smaller countries have much smaller ratios, examples being Guatemala with a 12.6% tax to GDP ratio and the Dominican Republic with a ratio of 14.1%. Subnational governments in the region have relatively small taxing powers and collect only a small proportion of taxes.
Revenues from non-renewable natural resources have decreased owing to the decline in commodity prices since 2014. Hydrocarbon related revenues have decreased by an average of 0.7 percentage points of GDP for the countries surveyed. Although the figures for 2015 are not included in the report the hydrocarbon related revenues are projected to fall by an average of 2.1 percentage points for 2015. Mining revenues fell by an average of 0.1 percentage points in 2014. The government revenues from non-renewable natural resources are not classified as taxes and are therefore not included in the computation of the tax to GDP ratio.
Consumption taxes account for a greater proportion of tax revenues in the region compared to the OECD average. VAT and sales taxes brought in 31.2% of tax revenues in the region in 2013 compared with an average of 20.2% in OECD countries. Taxes on income and profits accounted for an average of 27.4% of tax revenues in the region compared to an average of 33.7% in OECD countries. Social security contributions accounted for an average of only 16.6% in the region, compared to 26.1% in OECD countries.