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With the Covid crisis, the average tax collection in Latin America and the Caribbean fell by 0.8%, a fall that reveals various structural problems. These are the main conclusions of the latest report “Tax Statistics 2022” published by the OECD.
In Latin America and the Caribbean, in addition to being seriously impacted by Covid, tax revenues suffer from structural problems, linked, among others, to a high rate of informality, low tax progressivity and high dependence on VAT. These are some of the main conclusions drawn by the recent report: “Tax Statistics 2021”. Prepared by the Organization for Economic Cooperation and Development (OECD) and ECLAC
The Economic Commission for Latin America and the Caribbean urged to improve tax collection in the region to face the current post-pandemic crisis and the effects of the war in Ukraine, which have slowed growth and triggered inflation.
According to the institution’s latest report, tax pressure decreased by 0.8% in 2021, reaching 21.9% of gross domestic product (GDP) on average, with falls in 20 of the 26 countries covered in the report.
Data that contrasts with that of the countries of the Organization for Economic Cooperation and Development (OECD), where the tax pressure increased slightly by 0.1% to reach an average of 33.5% of GDP.
The region is facing a complex economic situation, characterized by a slowdown in growth, rising inflation, interest rate hikes and volatility in international markets. A context generates pressure on public finances, to which are added
In the Fiscal Panorama of Latin America and the Caribbean, 2022, a fiscal policy design is proposed that contributes to promoting sustainable development, based on the strengthening of collection and the progressiveness of the tax structure and on the strategic orientation of spending public to turn it into an instrument of development. It also examines the fiscal rules and the mechanisms used to relax them during the pandemic, and proposes to rethink them so that they contribute to a pro-growth fiscal policy. Finally, the fiscal frameworks applied to the production of hydrocarbons and mining are studied to enhance their contribution to the implementation of the 2030 Agenda for Sustainable Development.
Interviewed : Sebastián Nieto, director of the Development Unit for Latin America and the Caribbean of the OECD, and coordinator of this report was in our studies
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