Latin America’s Tax Revenues Rise as Major Fiscal Reforms Begin Reshaping Regional Economies, OECD Report Finds

Among the standout performers were Antigua and Barbuda, Brazil, Barbados, and Cuba, all of which posted substantial increases in their tax-to-GDP ratios after implementing significant tax policy reforms.

Tax revenues increased across much of Latin America and the Caribbean in 2024, with countries implementing aggressive fiscal reforms recording some of the strongest gains, according to a major new international report that highlights the region's evolving economic landscape and growing pressure on governments to strengthen public finances.

The latest edition of Revenue Statistics in Latin America and the Caribbean 2026, released during the United Nations Economic Commission for Latin America and the Caribbean (UN-ECLAC) 38th Regional Fiscal Seminar in Santiago, Chile, reveals that tax revenues as a share of GDP rose in 15 of the 28 countries surveyed across the region last year.

The report — jointly produced by the OECD, UN-ECLAC, the Inter-American Development Bank (IDB), and the Inter-American Center of Tax Administrations (CIAT) — paints a picture of a region navigating slow economic growth, volatile commodity markets, and mounting fiscal pressures through tax reform and revenue modernisation.

Among the standout performers were Antigua and Barbuda, Brazil, Barbados, and Cuba, all of which posted substantial increases in their tax-to-GDP ratios after implementing significant tax policy reforms.

Brazil recorded a 2.0 percentage point increase, Barbados rose by 2.1 points, Antigua and Barbuda climbed by 1.9 points, while Cuba saw the largest increase of all, jumping by 5.0 percentage points.

According to the report, these gains were largely driven by reforms targeting taxes on goods and services, particularly value-added tax (VAT), alongside stronger corporate income tax collections.

The findings underscore how tax reform is increasingly becoming a central policy tool across Latin America and the Caribbean as governments seek to stabilise budgets, strengthen social spending, and reduce dependence on volatile commodity revenues.

At the same time, the report highlights the vulnerability of many regional economies to fluctuations in oil, gas, and mining markets.

Trinidad and Tobago recorded one of the steepest declines in tax revenues, with its tax-to-GDP ratio falling by 3.0 percentage points due to weaker energy prices and declining natural gas production.

Guyana — despite remaining one of the world's fastest-growing economies because of its booming oil sector — also saw its tax-to-GDP ratio decline by 2.4 percentage points, as rapid economic expansion outpaced growth in government tax collection.

The report found that tax-to-GDP ratios across the region ranged dramatically in 2024, from just 9.2% in Guyana to 33.7% in Brazil.

The regional average rose slightly to 21.7% of GDP, up 0.2 percentage points from the previous year.

However, excluding Cuba's exceptional increase, the regional average was effectively unchanged, reflecting ongoing economic fragility, sluggish growth, and continuing commodity market instability.

Despite some progress, Latin America and the Caribbean still remain significantly below OECD economies in overall tax collection capacity.

The OECD average tax-to-GDP ratio increased to levels approximately 12.3 percentage points higher than the LAC regional average in 2024, illustrating the persistent structural gap in government revenue generation between developed and developing economies.

Economists note that lower tax collection levels in the region continue to constrain public investment in healthcare, education, infrastructure, social protection, and climate resilience.

The report also highlights the continuing dominance of consumption taxes across much of the region's fiscal systems.

Taxes on goods and services accounted for nearly half — 49.2% — of total tax revenues across the region in 2024, with VAT alone generating 28.9% of revenues on average.

By comparison, taxes on income and profits contributed 29.1% of total revenues, including 17.4% from corporate income taxes and just 9.6% from personal income taxes.

Social security contributions represented 15.9% of total revenues.

The relatively low contribution from personal income taxes compared with OECD countries reflects long-standing structural challenges in the region, including high levels of informality, unequal income distribution, tax evasion, and limited tax administration capacity.

Looking at longer-term trends, the report found that the regional average tax-to-GDP ratio has increased by 1.5 percentage points since 2014, driven largely by expanded VAT systems and stronger taxation of income and profits.

Over the same decade, tax revenues as a share of GDP rose in 21 countries while declining in seven.

Tax revenues per capita increased across every country in the study, with the Dominican Republic, Nicaragua, and Guyana more than doubling their tax revenues per person in purchasing power parity (PPP) terms.

Commodity dependence continues to remain a defining feature of fiscal performance in several major economies across the region.

Average hydrocarbon revenues among major oil and gas producers dropped sharply from 4.1% of GDP in 2023 to 3.1% in 2024 as energy prices weakened.

Colombia and Trinidad and Tobago were among the hardest hit, although stronger oil revenues in Guyana partially offset regional declines.

Mining revenues also slipped from 0.55% of GDP in 2023 to 0.47% in 2024, largely due to falling mining tax revenues in Colombia.

However, the report projects some recovery in mining revenues during 2025, with higher global prices for gold, silver, and copper expected to boost government income from extractive industries.

Hydrocarbon revenues, meanwhile, are projected to remain under pressure as global oil and gas prices continue to soften.

Fiscal experts say the findings reinforce the need for Latin American and Caribbean economies to diversify their tax bases and reduce overreliance on volatile commodity cycles.

The report also highlights the growing importance of modern tax administration systems, digital compliance tools, anti-evasion measures, and broader tax reform efforts as governments attempt to strengthen fiscal sustainability while responding to rising social and economic demands.

The publication is widely regarded as one of the most comprehensive annual assessments of taxation trends in Latin America and the Caribbean and serves as a critical benchmark for policymakers, investors, economists, and international financial institutions.