Burden sharing

IT IS a report with the driest of titles: “Revenue Statistics in Latin America 1990-2012”. The subject-matter doesn’t sound hugely promising either: an analysis of regional tax takes. But the way in which governments raise revenues from citizens, and the value they deliver in return, could scarcely be more important. And the report, published today by the OECD, the UN Economic Commission for Latin America and the Inter-American Centre of Tax Administrations, illuminates some big shifts over the past 20 years and some of the equally large policy problems that remain.

In aggregate, the region is taking in far more tax revenue now than it did two decades ago: the ratio of tax revenues to GDP has risen from 13.6% in 1990 to 20.7% in 2012. That still leaves the region lagging the OECD average (which stood at 34% in 2011), but such averages disguise some striking variations.

At one end of the scale, Guatemala takes in just 12.3% of GDP in tax revenues. There is no single “optimal” tax burden: much depends on public attitudes to the size of the state, and which services are being provided privately. But that low level of tax intake makes it very difficult to offer basic services like health care, education and security. At the other end of the scale, Argentina and Brazil take in 37.3% and 36.3% of GDP in taxes respectively. This sort of rich-world tax...Continue reading



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