Tax revenue as a percentage of GDP in Latin America and the Caribbean (LAC) recovered its pre-pandemic level in 2021, thanks to economic recovery and higher commodity prices, according to a new report.
The report Tax Statistics in Latin America and the Caribbean 2023, published today at the 35th ECLAC Regional Seminar on Fiscal Policy in Santiago, Chile, reveals that average tax collection as a percentage of GDP increased 0.8 percentage points (pp) in 2021, to reach 21.7% , which is the same level as in 2019, prior to the COVID-19 pandemic. Average tax collection as a percentage of GDP in LAC continued to be lower than the OECD average of 34.1% of GDP in 2021, by 12.5 pp
The new report shows that the ratio of tax collection as a percentage of GDP in LAC varied from 12.7% of GDP in Panama to 33.5% of GDP in Brazil in 2021. This ratio increased in 18 of the 25 countries between 2020 and 2021 and decreased in the remaining seven countries.
The largest increase was seen in Belize (up 5.0 pp from the prior year), which benefited from a recovery in tourism-related receipts. Strong revenue growth in Chile (2.8 pp), Peru (2.7 pp) and Brazil (2.4 pp) was supported by higher commodity prices and an increase in property tax revenue and services, driven by the economic recovery.
The largest decline was seen in Guyana, where nominal GDP increased 47% in 2021 due to a significant increase in natural resource production, while tax revenue increased 16%, resulting in a 4.5pp decline. of tax revenue as a percentage of GDP.
After falling 0.7 pp in 2020 at the height of the pandemic, tax revenues on goods and services recovered across the LAC region in 2021, increasing on average by 0.8 pp of GDP.
Taxes on goods and services continued to be the main source of tax revenue in the Latin American and Caribbean region in 2021, representing on average 50% of total tax revenue, and value added tax representing 29.9% of the total. . Income and profit taxes generated 26.7% of total tax revenue, of which corporate tax revenue represented 15.4% of total tax revenue.
According to the new report, the hydrocarbon and mining sectors have given a significant boost to public revenue in the Latin American and Caribbean region. Hydrocarbon-related revenues in major oil producers increased from an average of 2.1% of GDP in 2020 to 2.6% of GDP in 2021 and are estimated to reach 4.2% of GDP in 2022. Mining revenues in major oil producers minerals and metals increased to 0.68% of GDP in 2021 (their highest level since 2011) and is estimated to reach 0.7% of GDP in 2022.
The report Tax Statistics in Latin America and the Caribbean 2023is a joint publication of the Inter-American Center of Tax Administrations (CIAT), the Inter-American Development Bank (IDB), the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), the Center for Tax Policy and Administration of the Organization for Economic Co-operation and Development (OECD) and the OECD Development Centre.
To access the report, data, overview, country notes and infographics, go to http://oe.cd/revstatslac
Press Contacts
- IDB: Fiscal Management Division, Romina Nicaretta ([email protected]; T: +1 202 623 1555)
- ECLAC: Public Information Unit ([email protected]; T: +56 2 2210 2040)
- CIAT: Coordination of Communication and Publications, Neila Jaén ([email protected]@ciat.org; T: +507 307 2428)
- OECD: Center for Tax Policy and Administration ([email protected]; T: +33 1 45 24 98 17); OECD Development Center ([email protected]; T: +33 1 45 24 82 96)
