The Inter-American Development Bank (IDB) says tax revenues rose moderately across Latin America and the Caribbean (LAC) in 2019 before declining sharply in 2020 as the COVID-19 pandemic drove down global economic activity.

The Washington-based financial institution said revenue statistics in Latin America and the Caribbean this year, shows that the average tax-to-gross domestic product (GDP) ratio in the LAC region rose to 22.9 per cent in 2019, an increase of 0.3 percentage points, due largely to increases in the Caribbean sub-region.

Although the COVID-19 pandemic subsequently caused a sharp decline in tax and resource revenues last year, the report identifies the key role of fiscal policy in the region’s response to the pandemic and considers how tax policy can contribute to a green and inclusive recovery.

Readers Bureau, Contributor

Edited by Jesus Chan

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