Governments across Latin America and the Caribbean collected less in taxes in 2023, largely because their economies slowed down and global prices for oil, gas, and minerals fell. That’s the big takeaway from a new report released on May 27 at the UN-ECLAC Regional Fiscal Seminar in Santiago, Chile.
According to the Revenue Statistics in Latin America and the Caribbean 2025 report, tax revenues in the region averaged 21.3% of GDP in 2023. That’s a small drop from 21.5% the year before and just below the pre-pandemic level of 21.4% in 2019.
What does this mean? Simply put, governments in the region—including Caribbean nations—are collecting less money through taxes compared to the size of their economies. That could make it tougher to fund things like health care, schools, and infrastructure.
The report covers 26 countries. Fourteen of them, including some Caribbean states, saw their tax-to-GDP ratios fall in 2023. The sharpest declines were in Chile and Peru, due mostly to a drop in income tax collections. This was linked to lower profits in key industries like mining and hydrocarbons, plus a wave of tax refunds and credits issued last year.
Tax-to-GDP ratios varied widely across the region. Guyana had the lowest at 11.6%, while Brazil had the highest at 32.0%. By comparison, the average among wealthier countries in the OECD group was 33.9%.
A closer look shows that income taxes—especially from countries rich in oil and minerals—fell slightly, while payroll taxes (like social security) ticked up a bit. Taxes on goods and services held steady.
Commodity prices played a major role in the revenue dip. Many countries in the region earn big money from oil and mining, but in 2023, those revenues fell. For example, hydrocarbon income dropped from 4.4% to 3.9% of GDP, and mining income fell from 0.74% to 0.59% of GDP. The report predicts these numbers went even lower in 2024—down to 3.2% and 0.5% of GDP respectively.
For the first time, the report also included non-tax revenue data—money governments earn from things like state-owned companies, land rentals, interest, and public service fees. Across 22 countries, these revenues averaged 3.1% of GDP. Cuba stood out with the highest share at 11.6%, while Peru had the lowest at 0.4%.
Why does this matter? When tax and non-tax revenues shrink, governments may struggle to balance their budgets. That could mean cutting services, raising taxes later, or borrowing more to make up the difference.
So even though the numbers don’t look dramatic at first glance, they reflect a bigger concern: that the region, including parts of the Caribbean, may be facing tighter finances in the near future.
