Fiscal Accounts in Central America

The average tax burden for the region is 13.4% of GDP, while the average public expenditure increased from 18.7% in 2013 to 19.2% at the end of 2014.

Monday, November 17, 2014

From the Introduction of the report Macrofiscal profiles in Central America, from Instituto Centroamericano de Estudios Fiscales (Icefi):

The fiscal situation has worsened in Central America in recent months, mainly due to a structural lack of sufficient resources to meet the needs of Central Americans and realize many of the commitments made by governments.

The most significant cases are El Salvador and Honduras which, given the existence of increasing fiscal deficits in recent periods and a significant accumulation of public debt, have embarked on strong austerity programs aimed at trying to reduce spending levels.

A similar situation has been observed in Guatemala, where austerity is the product of both a decline in revenues due to a weakening of the tax administration, and the refusal of Congress to approve the necessary bonds issues to finance part of the expenditure budget .



More on this topic

More Taxes, Again the Easy Way

September 2020

In order to access the $1.75 billion credit requested from the IMF, the Costa Rican government proposes to tax financial transactions, increase the tax on the profits of companies and individuals, and increase the tax on real estate.

On the afternoon of September 17, and in the context of a severe economic crisis that had been going on since before the beginning of the pandemic, the Alvarado administration presented the plan with which it intends to mitigate the fiscal impact of the Covid-19 crisis, a proposal to negotiate an agreement with the International Monetary Fund (IMF) to obtain a credit of $1.75 billion.

The Unstoppable Public Debt

September 2018

"Public debt in terms of simple average for the Central American region will continue growing, reaching 43.1% of GDP in 2018, after having registered 42.5% in 2017."

The Central American Institute of Fiscal Studies (Icefi) estimates that for the current year the size of public expenditure of the Central Government in relation to the respective Gross Domestic Product of each country will be 21.4% in Costa Rica, 20.4% in El Salvador, 20% in Honduras, 18.4% in Nicaragua, 17.6% in Panama and 12.1% in Guatemala.

Fiscal Outlook in Central America

February 2018

In one of the regions that receives the least amount of taxes in the world, the tax burden remained relatively stable in 2017.

From the section Fiscal Outlook for Central America, from the report "Macro-fiscal Profiles: 9th edition", by the Central American Institute of Fiscal Studies (Icefi):

Tax Burden is Growing in Central America

August 2017

The tax burden grew from 13.4% in 2013 to 14% in 2016, both due to the delayed effect of the tax reforms in Honduras and Nicaragua, as well as better management on the part of tax entities in Guatemala and Panama.

From the Regional Economic Report (IER) 2016-2017: Opportunities and challenges for Central America, by the SIECA:

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