Tax revenues in Latin American countries are lower as a proportion of their national incomes than in most OECD countries, but are rising slowly. Revenue Statistics in Latin America shows that the average tax revenue to GDP ratio in the 15 Latin American countries covered by the report increased from 19% in 2009 to 19.4% in 2010, after falling from a high point of 19.7% in 2008.

The report, produced jointly by the OECD, the Inter-American Centre of Tax Administrations (CIAT) and The Economic Commission for Latin America and the Caribbean (ECLAC), notes that though the tax to GDP ratio did rise significantly across Latin American and Caribbean countries over the period 1990-2008 – by 5.8 percentage points compared to 1.5 for the OECD - at 19.4% in 2010 it is still far lower that the OECD average of 33.8%.

Across both OECD and Latin American countries there are wide national variations.  In 2010, the tax to GDP ratios for the Latin American and Caribbean countries range from 33.5% in Argentina (close to the OECD average) to 11.4% in Venezuela and in OECD countries from 47.6% in Denmark to 18.8% [1] 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.

Main findings:

Tax to GDP ratios

The difference between the OECD average tax to GDP ratio and that for the 15 LAC countries fell by 5 percentage points between 1990 and 2010.

In 2010, the tax to GDP ratio rose in 10 of the 15 LAC countries and fell in 4.

The largest increases in tax to GDP ratios in 2010 were in Chile (2.5 percentage points), Argentina (2.0 points), Ecuador (1.7) and Peru (1.1).

The largest fall in 2010 was in Venezuela (2.9 percentage points).

Tax structures

Following strong growth over the past twenty years, general consumption taxes (mainly VAT and sales taxes) accounted for 34.7% of tax revenues in the Latin American countries in 2010 (compared to 20.5% in OECD countries) whereas the share of specific consumption taxes (such as excises and taxes on international trade) declined to 16.5% (compared to an OECD average of 10.8% )

Taxes on income and profits accounted for 25.5% of revenues on average in the Latin American countries and social security contributions represented 17.2% ( in OECD the figures are 33.2% and 26.4% respectively).

Total tax revenues as percentage of GDP, 20101

1. Countries have been ranked by their total tax revenues to GDP ratios.

2. Represents the unweighted average for the above group of Latin American countries (15).  Chile and Mexico are also part of the OECD (34) group.

3. Represents the unweighted average for OECD countries

Source: OECD/ECLAC/CIAT (2012), Revenue Statistics in Latin America, OECD Publishing.

Tax structures in Latin America and OECD, 2010

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1. Unweighted average of the 15 Latin American and Caribbean countries in this publication. Chile and Mexico are also part of the OECD (34) group.

2. Represents the unweighted average for OECD member countries.

Source: OECD/ECLAC/CIAT (2012), Revenue Statistics in Latin America, OECD Publishing.