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Revenue Statistics in Latin America and the Caribbean 1990-2014
XXVIII ECLAC Regional Seminar on Fiscal Policy Santiago, Chile – March 16-17, 2016
Revenue Statistics in Latin America and the Caribbean
• Detailed, internationally comparable data on tax revenues in Latin
American and Caribbean (LAC) economies • 22 LAC economies from 1990-2014 • Comparisons with the average for OECD economies (and on-line data
for 32 non-LAC countries)
• Based on OECD Revenue Statistics methodology, an essential reference source for OECD member countries
• Joint project with the Economic Commission for Latin America and the Caribbean (ECLAC) , the Inter-American Centre for Tax Administrations (CIAT), and Inter-American Development Bank (IDB)
Revenue Statistics in Latin America and the Caribbean
I. Tax revenue trends 1990-2014
II. Tax structure
III. Fiscal revenues from non-renewable natural resources
IV. Future steps and conclusions
Tax revenues in LAC increased slightly in 2014, but continue
to be considerably lower than in most OECD countries
Total tax revenues in LAC and OECD, 1990-2014 (Percentage of GDP)
0
5
10
15
20
25
30
35
40
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Difference (A-B) LAC (22) (A) OECD (34) (B)
Wide national variations exist across LAC countries
(‘Americas Latinas’)
0 10 20 30 40
OECD (34)LAC (22)³
GuatemalaDominican Republic
El SalvadorParaguay²BahamasPanama
Venezuela²Peru
EcuadorMexico²
HondurasChile
ColombiaNicaragua
Costa RicaJamaica²Uruguay
Trinidad and TobagoBolivia²
Barbados²Argentina
Brazil
Total tax revenues in LAC countries and OECD, 2014 (Percentage of GDP)
Tax revenues rose significantly across the region over the
1990-2014 period
Tax to GDP ratios in LAC in 1990 and 2014
ARG
BHS
BRB
BOL
BRA
CHL COL
CRI
DOM
ECU
SLV
GTM
HND
JAM3
MEX NIC2
PAN PRY
PER
TTO URY
VEN2
5
10
15
20
25
30
35
40
5 10 15 20 25 30 35 40
2014
1990
Nevertheless, tax revenues barely increased between 2013
and 2014
Tax to GDP ratios in LAC in 2013 and 2014
ARG
BHS
BRB BOL
BRA
CHL COL
CRI
DOM
ECU
SLV
GTM
HND
JAM
MEX NIC PAN
PRY
PER
TTO URY
VEN
5
10
15
20
25
30
35
40
5 10 15 20 25 30 35 40
2013
2014
Tax revenues increase over GDP in 2014 was driven by
income taxes, and taxes on goods and services
-0.04 -0.02 0 0.02 0.04 0.06 0.08 0.1 0.12 0.14 0.16
Property
Other income tax
Others
Payroll
Social security
Corporate income tax
Goods and services
Personal income tax
Tax revenues growth in LAC, 2014 (Percentage points of GDP)
Revenue Statistics in Latin America and the Caribbean
I. Tax revenue trends 1990-2014
II. Tax structure: tax sources and administration
III. Fiscal revenues from non-renewable natural resources
IV. Future steps and conclusions
Tax collection in LAC is based on high indirect tax receipts
(general taxes), while direct taxation (i.e. personal) is low
Tax sources in LAC and OECD, 2013 (Tax collection as percentage of total tax revenues)
27.4
16.6
31.2
18.3
6.5
LAC (22)1
33.7
26.1
20.2
10.5
9.5
OECD (34)2
Taxes on income and profits Social-security contributions General consumption taxes
Specific consumption taxes Other taxes
However, since the 2000s, taxes on income and profits have
increased their contribution…
0
10
20
30
40
50
60
19
90 92
94
96
98
20
00 02
04
06
08
10
12
20
14
LAC
0
10
20
30
40
50
60
19
90 92
94
96
98
20
00 02
04
06
08
10
12
20
14
OECD
Taxes on income and profits (1000) Social-security contributions (2000) Taxes on goods and serv ices (5000)
Tax sources in LAC and OECD, 1990-2014 (Tax collection as percentage of total tax revenues)
… notably thanks to the corporate income tax, but also to
personal income taxes
0
2
4
6
8
10
12
19
90 92
94
96
98
20
00 02
04
06
08
10
12
20
14
LAC
0
2
4
6
8
10
12
19
90 92
94
96
98
20
00 02
04
06
08
10
12
20
14
OECD
Personal income tax Corporate income tax Other income taxSocial-security contributions Taxes on goods and services
Tax sources in LAC and OECD, 1990-2014 (Percentage of GDP)
Again, tax structures reflects a wide variation across the LAC
region
Tax sources in LAC countries, 2014 (Tax collection as percentage of total tax revenues)
0 20 40 60 80 100
OECD (32)²LAC (22)³
BahamasBolivia¹
Paraguay¹Costa RicaArgentina
BrazilUruguayEcuadorPanama
Barbados¹HondurasNicaragua
Mexico²GuatemalaDominican…
ColombiaVenezuela¹
ChileJamaica¹
El SalvadorPeru
Trinidad…
Income and profits Property Social security contributions Payroll Goods and services Other
In the Americas Latinas, value added taxes raised more
revenues than income taxes in most countries…
VAT vs Income taxes in LAC countries and OECD, 2014 (Percentage of GDP)
0
5
10
15
20
25
VAT Taxes on income and profits
… mostly explained by weak personal income tax collection
Personal and Corporate income tax revenues in ALC countries and OECD, 2014 (Percentage of GDP)
Note: For OECD, the data for 2013 are used. The share of taxes on income and the share of taxes on profits may not add up to the total share of taxes on incomes and profits due to unallocable revenue. Only countries that could allocate 75% or more of revenue of taxes on incomes and profits into the sub categories taxes on income and taxes on profits are shown in the figure above.
0
2
4
6
8
10
12
14
16
18
TTO PER COL CHL BOL HND BRA ARG SLV GTM DOM BRB URY CRI JAM OECD
Personal income tax Corporate income tax
Sub-national government finances are also limited in LAC…
Tax revenues by sub-sectors of general government in LAC and OECD, 2013 (Receipts as percentage of total tax revenue)
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
LAC
OECD
Central government State or local Social-Security Funds Supranational
…with the exceptions of Argentina, Brazil and Colombia
Tax revenues by sub-sectors of general government in LAC countries, 2014 (Receipts as percentage of total tax revenue)
0 10 20 30 40 50 60 70 80 90 100
VenezuelaUruguay
Trinidad and TobagoPeru
ParaguayPanama
NicaraguaMexico
JamaicaHonduras
GuatemalaEl Salvador
EcuadorDominican Republic
Costa RicaColombia
ChileBrazil
BoliviaBarbadosBahamasArgentina
LAC
Central governmentGobierno central
State or local Social-Security FundsFondos de seguridad social
Revenue Statistics in Latin America and the Caribbean
I. Tax revenue trends 1990-2014
II. Tax structure
III. Fiscal revenues from non-renewable natural resources
IV. Future steps and conclusions
Fiscal revenues from non-renewable natural resources are
key in half of the countries in LAC
Non-renewable natural resources revenues in LAC countries, 2014 (USD billion and percentage of GDP)
0 20 40 60 80 100
Jamaica
Suriname
Dominican Republic
Trinidad and Tobago
Bolivia (Plur. State of)
Peru
Chile
Argentina
Ecuador
Colombia
Brazil
Venezuela (Bol. Rep. of)
Mexico
As % of GDP
PEMEX
8.9
12.3
0.5
5.8
0.04
4.2
1.7
10.8
1.9
1.8
2.3
13.8
7.3
The reliance on non-renewable natural resources explains
the fall in total revenues in these countries in 2014…
2013 (r) 2014 (p) Δ 2013 (r) 2014 (p) Δ 2013 (r) 2014 (p) Δ
Argentina 1.8 1.9 0.1 1.7 1.8 0.1 0.1 0.1 0.0
Bolivia (Plur. State of) 14.2 13.8 -0.4 13.5 13.1 -0.4 0.7 0.7 0.0
Brazil 2.2 1.7 -0.5 1.8 1.6 -0.2 0.4 0.1 -0.3
Chile 2.1 1.8 -0.3 .. .. .. 2.1 1.8 -0.3
Colombia 5.1 4.2 -1.0 4.8 3.9 -0.9 0.4 0.3 -0.1
Dominican Republic 0.6 0.5 -0.1 .. .. .. 0.6 0.5 -0.1
Ecuador 12.1 10.8 -1.3 12.1 10.8 -1.3 .. .. ..
Jamaica 0.1 0.0 -0.1 .. .. .. 0.1 0.0 -0.1
Mexico 8.0 7.3 -0.8 7.8 7.0 -0.8 0.2 0.2 0.0
Peru 2.8 2.3 -0.5 1.9 1.6 -0.3 0.9 0.7 -0.3
Suriname 6.2 5.8 -0.4 5.5 5.0 -0.6 0.6 0.9 0.2
Trinidad and Tobago 11.7 12.3 0.5 11.7 12.3 0.5 .. .. ..
Venezuela (Bol. Rep. of) 12.2 8.9 -3.3 12.2 8.9 -3.3 .. .. ..
Latin America and the
Caribbean 6.1 5.5 -0.6 7.3 6.6 -0.7 0.6 0.5 -0.1
Country
Total Hydrocarbons1Mining
Public revenues from non-renewable natural resources in LAC countries, 2013-2014 (Percentage of GDP)
… and more falls are to come in 2015
Non-renewable natural resource revenues in LAC countries, 2000-2015(e) (Percentage of GDP)
Notes: Mining covers Argentina, Bolivia, Brazil, Chile, Colombia, Dominican Republic, Jamaica, Mexico, Peru and Suriname. Hydrocarbons include Argentina, Bolivia , Brazil, Colombia, Ecuador, Mexico, Peru, Suriname, Trinidad and Tobago and Venezuela
Looking forward, commodity prices are not expected to return to
pre-2014 levels soon
Commodity prices (Observed and forecasts ; index 100 = 2005)
0
50
100
150
200
250
2011 2012 2013 2014 2015 2016 2017
Minerals and metals Crude oil
Source: ECLAC, based on data from IMF
Revenue Statistics in Latin America and the Caribbean
I. Tax revenue trends 1990-2014
II. Tax structure
III. Fiscal revenues from non-renewable natural resources
IV. Future steps and conclusions
• Improve direct tax data
• Deepen the analysis on regional governments
• Broaden the analysis on commodity revenues (i.e. food)
• Continue expanding country coverage
• …
Future steps
Future steps (I): Within taxes on income and profits, there
is still room for improvement in data allocation
32%
61%
23%
LAC
76%
25%
2%
OECD
Personal income tax Corporate income tax Unallocable income tax
Future steps (II): Data and analysis by sub-sectors of
government merits (more) attention
Tax revenues by sub-sectors of general government in LAC countries, 2014 (Receipts as percentage of total tax revenue)
0 10 20 30 40 50 60 70 80 90 100
VenezuelaUruguay
Trinidad and TobagoPeru
ParaguayPanama
NicaraguaMexico
JamaicaHonduras
GuatemalaEl Salvador
EcuadorDominican Republic
Costa RicaColombia
ChileBrazil
BoliviaBarbadosBahamasArgentina
LAC
Central governmentGobierno central
State or local Social-Security FundsFondos de seguridad social
Future steps (III): Public revenues from food commodities
are a relevant part of the tax story in the LAC region
Source: Alberola, I. Kataryniuk, A. Melguizo and R. Orozco (2015), “Fiscal policy and the cycle in Latin America: the role of financial conditions and fiscal rules” , BIS Working Paper 543
Fiscal balance in Argentina, 2000-2013 (Percentage of GDP)
-4.00%
-3.00%
-2.00%
-1.00%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013.0 2014
Commodity linked Argentina Primary balance Structural Primary balance
Future steps (and IV): Continue expanding country coverage
• Antigua and Barbuda • Belize • Cuba • Dominica • Grenada • Guyana • Haiti • St. Kitts and Nevis • St. Lucia • St. Vincent and the Grenadines • Suriname • …
Conclusions (I): Beyond Americas Latinas, tax revenue
trends confirm LAC-OECD convergence has stalled
• The average tax burden in LAC increased from 21.5% in 2013 to 21.7% GDP in 2014. This followed a rise of 1.5 percentage since 2010, reversing the decline during the financial crisis
• The average tax burden in LAC countries is still far behind from the OECD average (34.4% of GDP in 2013). The gap has remained steady at 13 percentage points since 2008
• There is a wide variation across countries. The tax to GDP ratios in LAC countries range from 12.6% (Guatemala), 14.1% (Dominican Republic) and 16.5% ( El Salvador) to 30.4% (Barbados), 32.2% (Argentina) and 33.4% (Brazil)
Conclusions (II): Tax structures in LAC countries are
centralised, and heavily based on indirect taxes
• Following strong growth over the past decades, general consumption taxes (mainly VAT and sales taxes) account for nearly one third of tax revenues in the LAC countries in 2013 (31.2%), compared with one fifth (20.2%) in OECD
• Contributions from direct taxes are significantly lower in LAC countries. Taxes on income and profits accounted for 27.4% of revenues on average in the LAC countries and social security contributions represented 16.6% (in OECD the corresponding figures are 33.7% and 26.1% respectively)
Conclusions (III): Public revenues are decreasing in some
commodity-rich countries in LAC
• The sharp decline in international oil prices resulted in a significant reduction of hydrocarbon-related revenues in the region (from 7.3% of GDP in 2013 to 6.6% of GDP in 2014). Non-tax revenues bore the brunt of the decline, falling sharply in Ecuador and Venezuela
• In 2015, hydrocarbon revenues are estimated to have returned to their pre-boom level, falling from an average of 6.6% of GDP in 2014 to 4.5% of GDP
• Mining revenues were also affected by falling prices, dropping to 0.5% of GDP on average from 0.6% of GDP in 2013. Tax revenues, derived mainly from corporate income taxes, fell sharply as profit margins in the sector tightened. The rise in production coupled with currency depreciations served to smooth the shock
• Given the persistent economic slowdown and the weak price projections for most commodities, a no-policy change scenario suggests that the gap in tax revenues between LAC countries and the OECD will persist
• Some countries in the region are implementing/defining/debating structural fiscal reforms that increase revenues. Sufficiency, efficiency, equity and simplicity principles should drive these process, accompanied by institutional improvements (e,g, fiscal frameworks, rules, councils)
• For non-renewable natural resources, institutions to ensure commodity booms traslate into sustainable economic development should be implemented (e.g. stabilisation funds)
Conclusions (and IV): Policy action is needed
Abiertos a escuchar más ideas - Gracias!
www.latameconomy.org/es/revenue-statistics/