The tax revenues as a percentage of gross domestic product (GDP) in the region recovered their pre-pandemic level in 2021thanks to the economic recovery and the higher prices of raw materials, revealed this Tuesday a report presented at the headquarters in Chile of the Economic Commission for Latin America and the Caribbean (Cepal).
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According to the document «Tax Statistics in Latin America and the Caribbean 2023», average tax collection as a percentage of GDP increased by 0.8% in 2021 to 21.7%, the same level as in 2019.
The highest proportion in 18 countries and resulted in the remaining 7, with Belize declining the largest increase (5%) due to tourism receipts.
Belize is followed by Chile (2.8%), Peru (2.7%) and Brazil (2.4%) thanks to «higher prices of raw materials and an increase in tax revenues on goods and services , driven by the economic recovery», according to the document, prepared jointly by ECLAC and the Organization for Economic Cooperation and Development (OECD).
The regional average, however, continued to be lower than that of the OECD, which in 2021 reached 34.1% of GDP, added the text, in whose publication the Inter-American Center of Tax Administrations (CIAT) and the Inter-American Bank of Taxes also participated. Development (IDB).
Taxes on goods and services continued to be the main source of tax revenue in the region and in 2021 represented an average of 50% of the total, while taxes on income and profits generated 26.7%.
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The report further said that the hydrocarbon and mining sectors gave «an important boost to public revenue in the Latin American and Caribbean region.»
«Revenues related to hydrocarbons in the main oil producers increased from an average of 2.1% of GDP in 2020 to 2.6% of GDP in 2021 and it is estimated that they will reach 4.2% of GDP in 2022», noted the document.
Mining revenues in the main mineral and metal producers, for their part, «increased to 0.68% of GDP in 2021 (its highest level since 2011) and are estimated to reach 0.7% of GDP in 2022» , added.
Latin America, the most unequal region in the world and the most affected by the pandemic, It grew 6.9% in 2021, as a rebound after the 6.8% plunge recorded in 2020, the biggest recession in 120 years.
The slowdown in the region began in the second half of 2022, which closed with an estimated growth of 3.7%, according to ECLAC, which forecasts growth for this year of only 1.2%.