Revenue Statistics in Latin America and the Caribbean 2020 was published om 7 May 2020 and covers 26 countries in the region. The publication is prepared jointly by the OECD’s Centre for Policy and Tax Administration, the OECD Development Centre, the UN Economic Commission for Latin America and the Caribbean, the Inter-American Center of Tax Administrations (CIAT) and the Inter-American Development Bank, with support from the EU Regional Facility for Development in Transition for Latin America and the Caribbean.

Tax to GDP ratios

The average tax to GDP ratio in the region in 2018 was 23.1%, but there are significant differences between the ratios in different countries. In Guatemala the tax to GDP ratio was 12.1% while in Cuba it was 42.3%. Apart from Cuba, all the countries surveyed had a tax to GDP ratio below the OECD average of 34.3%.

There was a small increase in the average tax to GDP ratio in the region from 2017 to 2018 and this reflected a slight economic recovery due to improved domestic demand, higher commodity prices and increased trade. The largest increase in the tax to GDP ratio in the year was in Trinidad and Tobago (3.3% percentage points higher), driven by corporate income tax receipts following a recovery in the energy industry. There were also significant increases in the tax to GDP ratio in Belize (1.4 percentage points higher); and Guyana (1.3 percentage points higher), mainly due to administrative and policy reforms.

A weaker economic environment in some countries led to a decrease in the tax to GDP ratio, the largest decreases being in Argentina (1.3 percentage points lower) and Nicaragua (0.8 percentage points lower).

Tax Structure

The statistics show that the tax to GDP ratios in countries of the region have risen almost continuously from 1990 to 2018, increasing by more than 7 percentage points in the period from 15.9% to 23.1%. The increase in tax revenues in the region has been driven by value added tax (VAT) and by taxes on income and profits. Ten countries of the region have introduced a VAT in the period since 1990 and most of the other countries have introduced measures to increase their VAT revenue by increasing rates, expanding the tax base and strengthening collection.

Tax Mix

The average tax mix in the region relies strongly on revenue from taxes on goods and services which account for around half of the total tax revenue. Revenue from VAT and from taxes on income and profits each accounted for 27.8% of the total tax revenues in the region in 2018. Countries of the region relied more heavily on corporate income tax (15.3% of total tax revenue) than on personal income tax which only accounted for 9.7% of total tax revenue.

Special Features

This edition includes data on fiscal revenues from non-renewable natural resources for some countries of the region in 2018. The hydrocarbon related revenues rose to 2.7% of GDP in 2018 compared to 2.0% of GDP in the two previous years, as a result of higher international prices.

Another special feature focuses on Equivalent Fiscal Pressure (EFP) in the region in the period from 1990 to 2018. The EFP is calculated by adding together the tax to GDP ratio, compulsory contributions to private social insurance systems and non-tax revenues from natural resources, and is expressed as a percentage of GDP. The average EFP in the region in 2018 was 25% of GDP which represented an increase of 0.2 percentage points from the previous year.