Latin America needs to increase tax collection to eliminate inequality

Authorities, experts and academics gathered at a regional seminar concluded this Wednesday that it is necessary to increase fiscal space to achieve more productive, inclusive and sustainable societies in Latin America and the Caribbean.

During XXXVI Regional Seminar on Fiscal Policy, organized by the Commission Economic for Latin America and the Caribbean (ECLAC) and supported by the Spanish Agency for International Development Cooperation (AECID), the importance of improving tax collection and making more effective use of public resources was highlighted.

José Manuel Salazar-Xirinachs, executive secretary of ECLAC, warned about the current challenges in the region, where low economic growth and high financial costs have complicated the management of fiscal policy.

“LCountries have a limited fiscal spacewith growing pressures to contain public spending with a view to safeguarding the dynamics of public debt,” said the senior United Nations official.

And he added that when countries have to dedicate three, four and even five points of GDP to debt service, the availability of resources for expenses and investments in health, education, infrastructure and other key areas for economic and social development is reduced. .

“For this reason, at ECLAC we have been insisting that in order to generate the capacity to grow in a high, sustained, inclusive and sustainable manner, and get out of the low growth trap, the countries of the region They must scale and improve their productive development policies”Salazar-Xirinachs emphasized.

He also emphasized the need to improve productive development policies to achieve sustainable and inclusive growth.

During the seminar, topics such as public spending, public debt sustainability and the possible fiscal impacts of the carbon tax were discussed. Also presented was the Fiscal Overview of Latin America and the Caribbean 2024 of ECLAC, which highlights the importance of close structural gaps in productivityproductive heterogeneity, social and environmental inequality to achieve sustainable and inclusive development.

International cooperation

Daniel Titelman, director of the Economic Development Division of ECLAC, pointed out the need to strengthen tax collection and forge fiscal agreements to generate permanent resources for investment.

He also highlighted the importance of international cooperation in this area, as well as the work of the Regional Tax Cooperation Platform for Latin America and the Caribbean.

In addition, the report was presented Tax Statistics in Latin America and the Caribbean 2024shows an increase in tax revenue as a percentage of GDP in the region in 2022partly due to an increase in revenues from oil and gas extraction.