Informativo
eCIAT
ISSN 1684-9833 • Year 6 / Special Edition / January 20, 2014
The Executive Secretariat Informs
LATIN AMERICA: TAX REVENUES CONTINUE TO RISE, BUT ARE LOW AND VARIED AMONG COUNTRIES, ACCORDING TO NEW OECD-ECLAC-CIAT REPORT Argentina and Brazil have the highest tax revenue to GDP ratio, while Guatemala and Dominican Republic stand at the lower end. Santiago, 20 January 2014 – Tax revenues in Latin American countries continue to rise but are lower as a proportion of their national incomes than in most OECD countries. The publication Revenue Statistics in Latin America 1990-2012 (third edition) shows that the average tax revenue to GDP ratio in the 18 Latin American and Caribbean countries covered by the report[1] increased steadily from 18.9% in 2009 to 20.7% in 2012 after falling from a high point of 19.5% in 2008. The report, produced jointly by the Inter-American Centre of Tax Administrations (CIAT), the Economic Commission for Latin America and the Caribbean (ECLAC) and the OECD, launched today during the XXVI Regional Seminar on Fiscal Policy, which is being held at ECLAC headquarters in Santiago, Chile. It shows that the tax to GDP ratio rose significantly across Latin American and the Caribbean over the past two decades – from 13.9% of GDP in 1990 to 20.7% of GDP in 2012. But the tax to GDP ratio is still 14 percentage points below the OECD average of 34.6%. Wide national variations exist across Latin American countries. At the upper end are Argentina (37.3%) and Brazil (36.3%), which are both above the OECD average, while at the lower end are Guatemala (12.3%) and Dominican Republic (13.5%). The corresponding range in OECD countries was from 48.0% in Denmark to 19.6%[2] in Mexico. The share of tax revenues collected by local governments in Latin America is small in most countries and has not increased, reflecting the relatively narrow range of taxes under their jurisdictions compared with OECD countries. A special chapter in the report describes the trends driving revenues from non-renewable natural resources across Latin America. Increased global demand for commodities, especially in large emerging markets, has led to sharp price increases and greater fiscal revenues associated with non-renewable natural resources. While these revenues increased at a faster rate than other government revenues before the crisis, their performance has been roughly 3 times more volatile than overall tax-to-GDP growth since 2000. In many Latin American countries, fiscal revenues from non-renewable natural resources continue to be very important as a percentage of total revenues, accounting for more than 30% of the total in Bolivia, Ecuador, Mexico and Venezuela. This implies both a greater benefit from the revenues they generate as well as a higher level of risk due to the dynamics of the global market.