Revenue Statistics in Latin America 2020

                     This post is a summary of the book published with the incomplete title above in 2020 at   https://read.oecd-ilibrary.org/taxation/revenue-statistics-in-latin-america-and-the-caribbean-2020_68739b9b-en-es#page12

                       Revenue statistics in Latin America provides internationally comparable data on tax levels and tax structures for countries. In this publication, "taxes" are defined as compulsory, unrequited payments to general government. Taxes are unrequited in the sense that benefits provided by government to taxpayers are not normally in proportion to their payments. Compulsory social security contributions, paid to governments are classified as taxes. In 2018, the average tax-to-GDP ratios in the LAC (Latin America and Caribbean) region was 23.1%. Across the region, tax-to-GDP ratios ranged from 12.1% in Guatemala to 42.3% in Cuba in 2018. Between 1990 and 2018, the average tax-to-GDP ration in LAC countries rose continuously, increasing from 15.9% to 23.1%. The main contributors to the increase in tax revenues in the LAC region were Value-added taxes (VAT) and taxes on income and profits. Improving tax systems across LAC region is not just a matter of raising higher revenues: the sources of these revenues also matters in addressing the region's social and economic goals. Fiscal policy is essential to build capacities, address development traps and ensure inclusive and sustainable development in LAC countries. This book represents an invaluable resource for governments as they look to strengthen fiscal policy. By providing harmonised and detailed tax data, it allows for in-depth tax-policy analysis, identifying not only how the level of tax revenues varies by country but also which instruments generate these revenues. Argentina, Brazil and Uruguay show similar tax-to-GDP ratios and levels of income to some OECD countries. Empirical analysis suggest that stronger tax collection, accompanied by better institutions, education and economic diversification allowed many OECD countries to evade the middle income trap, in contrast to LAC countries. Tax morale, the intrinsic motivation to pay taxes, is a key aspect of a tax system, since most tax system rely on the voluntary compliance of taxpayers. This tax morale amongst individuals appears to be falling across LAC, albeit from a high base.The proportion of those who find evading taxes "justifiable" increased from 17% to 27%. The finding highlight the role for taxpayer education in building tax morale. OECD has surveyed taxpayer education initiatives in 50 countries to be presented in a 2020 report "Building Tax Culture, Compliance and Citizenship." International co-operation can play an important role in improving tax morale by supporting countries to strengthen and simplify tax system and improve the efficiency and quality of public spending. A country's tax revenue as a share of GDP is a variable defined as the amount of monetary resources that a given country captures by applying a set of taxes and similar instruments that, in general, comprise the essential basis of State financing. In conventional terms, this indicator is usually expressed in relation to a country's gross domestic product (GDP), so as to ensure a comparable unit of measure. Below the ranking with the highest tax-to-GDP ratio to the lowest. We can see the Brazil has the second highest tax-to-GDP ratio in the Americas.

Tax-to-GDP ratio 2018 in PanAmerican countries                                 Rest of the World

Canada    33.2%                                                                                         France      45.9%          

Brazil     33.1%                                                                                         Sweden      43.9%

Uruguay    29.2%                                                                                        Italy       41.9%

Argentina      28.8%                                                                                   Norway      39.6%                                         

 Guyana      27.4%                                                                                      Germany      38.5%

Bolivia     25.4%                                                                                         Portugal       34.8%

U.S.A.        24.4%                                                                                        Spain       34.6%

Costa Rica      24.0                                                                                        U.K.       32.9%

Nicaragua     23.0%                                                                                   New Zealand     32.9%

Honduras       22.3%                                                                                          Japan      32.0%

Chile        21.1%                                                                                             Australia      28.7%

Ecuador    20.6%                                                                                          South Africa       28.6%

Colombia       19.4%                                                                                        Switzerland        28.0%

Peru         16.4%                                                                                              South Korea       26.8 % 

Mexico      16.1%                                                                                                 Russia       24.2%

Panama      14.6%                                                                                                Ireland      22.7%

Paraguay        14.0%                                                                                            India      18.1%

Guatemala     12.1%                                                                                            China        17.5%