In a recent call to action, the World Bank has exhorted governments across Latin America and the Caribbean to ramp up their investments in digital technology, with the aim of bolstering productivity and revenue streams.
This proactive move, spearheaded by the Chief Economist responsible for Latin America and the Caribbean at the World Bank, William Maloney, holds the promise of not only enhancing fiscal flexibility but also curtailing government expenditures.
Harnessing digital potential
Maloney believes that a strategic infusion of digital resources, such as e-procurement systems and precision-targeting of social programs, can substantially trim government expenses.
He also shared that it is estimated by the World Bank that approximately four percent of the region’s GDP remains underutilized by governments, necessitating a critical reevaluation of spending practices.
Revamping revenue streams
Beyond cost reduction, Maloney underscores the potential for digitalization to unlock hidden revenue streams.
Furthermore, the adoption of digital technology can act as a catalyst for bolstering revenue streams. Maloney astutely observes that not everyone actively seeks to evade taxes; oftentimes, the complexity of tax processes leaves individuals and businesses struggling to navigate the system. By simplifying these processes through technology, governments can encourage greater compliance.
