Latin America and the Caribbean made progress in their fiscal consolidation process in 2018, but the region's tax revenues are still insufficient to finance compliance with the Sustainable Development Goals (SDG) of the 2030 agenda, ECLAC warned on Friday.
The main obstacles to resource mobilization are high levels of tax evasion and illicit financial flows., stated the Economic Commission for Latin America and the Caribbean (ECLAC) in the report "Fiscal Panorama of Latin America and the Caribbean 2019", released this Friday (23.3.2019).
According to the agency's latest estimates, the cost of tax evasion and avoidance in the region reached 6,3% of the Gross Domestic Product (GDP) in 2017, a figure equivalent to 335.000 billion dollars.
Illicit flows resulting from the manipulation of international trade in goods reached 85.000 billion dollars in 2016, 1,5% of the regional GDP, the report said.
ECLAC Executive Secretary Alicia Bárcena highlighted in the document that tax policy as a tool to promote the United Nations SDGs has acquired greater relevance and there is growing recognition that the mobilization of domestic resources impacts development.
"Tax policies adopted not only have an impact on the level of available resources, but also on multiple dimensions of the SDGs, such as inequality, poverty and the well-being of women, the elderly, youth and other vulnerable populations," said Bárcena.
The Sustainable Development Goals (SDGs), also known as the Global Goals, are a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity.
The document highlights that in 2018 the fiscal consolidation process in Latin America and the Caribbean continued to advance, and the primary deficit of all countries in the region rose from 0,8% to 0,5% of GDP.
This adjustment is mainly due to the reduction in primary spending - total expenditure excluding interest payments - which fell from 19% of GDP in 2017 to 18,6% in 2018, ECLAC said.
Despite the improvement in the fiscal position, gross public debt is on the rise and reached 42,3% of GDP in 2018, compared to 39,4% in the previous year..
This, ECLAC explained, was due to Argentina's public debt, which increased by 38 points of GDP between 2017 and the third quarter of 2018 to reach 95,4% of the country's GDP.
Source: Reuters
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