Tax Transparency in Latin America 2023: Latam's Major Achievements in recent years

At the 8th Punta del Este Declaration Initiative meeting in Asunción, Paraguay, the OECD Tax presented its achievements in this area. It's great to see these nations leading the way in promoting accountability and fairness in taxation.

Tax Transparency in Latin America 2023: Latam's Major Achievements in recent years

OECD's Press Release

Published today during the 8th meeting of the Punta del Este Declaration Initiative held in Asunción, Paraguay, Tax Transparency in Latin America 2023 presents the latest progress achieved by 16 Latin American countries in tackling tax evasion and other illicit financial flows (IFFs) through transparency and exchange of information (EOI) for tax purposes. The event, which the President of Paraguay opened, Mr. Mario Abdo Benítez, brings together participants from 13 countries and seven partner organizations for two days of discussions on the region's latest developments and remaining challenges. Representatives from the civil society will also participate in the launch event.

Latin American countries' average tax-to-GDP ratio remains low in international comparison (20.7% in 2021 for the countries covered in the report, compared to the OECD average of 34.1%). To address the multiple challenges of tax evasion and IFFs, Tax Transparency in Latin America 2023 suggests practical strategies and action-oriented recommendations. The report underlines the crucial role of transparency and international cooperation in helping Latin American governments increase domestic resource mobilization for the benefit of their citizens.

Major achievements in recent years include:

  • At least EUR 27.8 billion in additional revenue (tax, interest, and penalties) have been identified in the region since 2009 through automatic exchange of financial account information (AEOI), exchange of information on request (EOIR), voluntary disclosure programs, and offshore tax investigations.
  • 15 Latin American countries are signatories of the multilateral Convention on Mutual Administrative Assistance in Tax Matters, the most comprehensive instrument for all forms of tax cooperation to tackle tax evasion and avoidance.
  • 10 Latin American countries already participate in AEOI.
  • 6 of the 8 Latin American countries assessed in the second round of EOIR peer reviews until 2022 were rated "Largely Compliant."
  • 3 Latin American countries (Argentina, Costa Rica, and Paraguay) have joined an innovative pilot project exploring the use of information provided through tax-treaty channels for other purposes, such as the fight against money laundering, terrorism financing, corruption, and customs offenses.

"I would like to commend the progress made by members of the Latin America Initiative in taking advantage of the exchange of information mechanisms at their full potential for tackling tax evasion and other forms of illicit financial flows," said Oscar Orué, Vice Minister of Taxation of Paraguay and Chair of the Punta del Este Declaration Initiative. "Latin American countries will continue working together in the next years, including through the sharing of experiences to promote the use of the exchange of information infrastructures, so countries can fully translate their commitment to tax transparency into sustainable revenue gains."

The report's findings demonstrate how Latin American jurisdictions that have developed and implemented a strategy to increase the use of EOI to support their audits and investigations gain tangible results. The Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum) continues to design and promote specific programs to improve capacities within Latin American tax administrations (e.g., Train the Trainer, Women Leaders in Tax Transparency). These efforts contribute to leveraging information-exchange infrastructures and ensure EOI's full implementation and use, generating additional resources sustainably.

"Within a few years, the Punta del Este Declaration Initiative has successfully led the ground for the exchange of information to take off in Latin America," said Zayda Manatta, Head of the Global Forum Secretariat. "The Secretariat is fully engaged in helping all members achieve their objectives and will pursue and intensify its capacity-building efforts to support them in achieving their goals."

Initially signed by four countries in November 2018, the Punta del Este Declaration now counts 15 signatories and includes all Latin American members of the Global Forum. It is supported by four development partners (Inter-American Center of Tax Administrations, Inter-American Development Bank, International Finance Corporation, and World Bank).

The Global Forum is the leading multilateral body mandated to ensure that jurisdictions worldwide adhere to and effectively implement both the exchange of information on request standard and the standard of automatic exchange of information. These objectives are achieved through a robust monitoring and peer review process. The Global Forum also runs an extensive capacity-building program to support its members in implementing the standards and help tax authorities best use cross-border information-sharing channels.