Average tax revenue as a percentage of GDP in Latin America remained lower than the Organization for Economic Co-operation and Development (OECD) average of 34.1% of GDP in 2021, by 12.5 percentage points.

The new report shows that the ratio of tax revenue as a percentage of GDP in LAC ranged 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 - 2021 and decreased in the remaining seven countries.

After falling 0.7 percentage points in 2020 at the height of the pandemic, revenues from taxes on goods and services recovered across the LAC region in 2021, increasing by an average of 0.8 points of GDP.

Goods and services taxes continued to be the main source of tax revenues in the LAC region in 2021, accounting on average for 50% of total tax revenues, with value-added tax accounting for 29.9% of the total.

Income and profit taxes generated 26.7% of total tax revenues, of which corporate income tax revenues accounted for 15.4% of total tax revenues.

According to the new report, the hydrocarbons and mining sectors have provided an important boost to public revenues 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 mineral and metal producers increased to 0.68% of GDP in 2021 (their highest level since 2011) and are estimated to reach 0.7% of GDP in 2022.

The report Tax Statistics in Latin America and the Caribbean 2023, is a joint publication of the Centro Interamericano de Administraciones Tributarias (CIAT), the Inter-American Development Bank (IDB), the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), the Tax Policy and Administration Center of the Organization for Economic Co-operation and Development (OECD) and the OECD Development Centre.

Translated by: A.M