Tax revenue trends, 1990-2019

Financing the development agenda of Latin America and the Caribbean (LAC) and its achievement of the Sustainable Development Goals (SDG) requires a step change in domestic resource mobilisation. The current COVID-19 crisis has further deepened the need for LAC countries to strengthen the collection of tax revenues to address structural weaknesses in their fiscal, social protection and health systems. The region was already challenged by widespread social unrest and subdued growth when the COVID-19 crisis began. While countries were quick to implement health and fiscal measures in response to the crisis to support the most vulnerable households and firms, their efforts were hindered by high levels of informality, underdeveloped social protection systems and limited fiscal space (see ). Once the region has emerged from the COVID pandemic, under a well-defined sequence of policies, fiscal policies will need to be reformed and tax systems strengthened to support the economic recovery for all and to ensure a sustainable and fair fiscal position over the medium to long term.