Latin America needs to increase tax revenues to eliminate inequality
Authorities, experts and academics gathered at a regional seminar concluded that it is necessary to increase fiscal space to achieve more productive, inclusive and sustainable societies in Latin America and the Caribbean.
During the 36th Regional Seminar on Fiscal Policy, organised by the Economic Commission for Latin America and the Caribbean (ECLAC) and supported by the Spanish Agency for International Development Cooperation (AECID), the importance of improving tax collection and making more effective use of public resources was highlighted.
José Manuel Salazar-Xirinachs, Executive Secretary of ECLAC, warned of the current challenges in the region, where low economic growth and high financial costs have complicated the management of fiscal policy.
"Countries have limited fiscal space, with increasing pressures to contain public spending in order to safeguard public debt dynamics," the UN official said.
He added that when countries have to devote three, four or even five points of GDP to debt servicing, the availability of resources for spending and investment in health, education, infrastructure and other key areas for economic and social development is reduced.
"For this reason, ECLAC has been insisting that in order to generate a capacity for high, sustained, inclusive and sustainable growth, and to break out of the low-growth trap, the countries of the region must scale up and improve their productive development policies," Salazar-Xirinachs emphasised.
He also emphasised the need to improve productive development policies to achieve sustainable and inclusive growth.
During the seminar, topics such as public spending, public debt sustainability and the possible fiscal impacts of the carbon tax were discussed. ECLAC's Fiscal Panorama of Latin America and the Caribbean 2024 was also presented, which highlights the importance of closing structural gaps in productivity, productive heterogeneity, social and environmental inequality in order to achieve sustainable and inclusive development.
International cooperation
Daniel Titelman, Director of ECLAC's Economic Development Division, pointed out the need to strengthen tax collection and forge fiscal agreements to generate permanent resources for investment.
He also highlighted the importance of international cooperation in this area, as well as the work of the Regional Platform for Tax Cooperation for Latin America and the Caribbean.
In addition, the report Tax Statistics in Latin America and the Caribbean 2024 was presented, which shows an increase in tax revenues as a percentage of GDP in the region in 2022, partly due to an increase in revenues from oil and gas extraction.