Overview

Latin America and the Caribbean (LAC) is still for many the region with the highest inequalities in the world, presenting major problems in the area of its fiscal performance. The LAC Fiscal Initiative is an OECD programme that fosters fiscal policy dialogue in the LAC region aiming to improve its taxation and public expenditure policies to support economic growth and income redistribution.

The programme is delivered through a regional forum for policy dialogue on fiscal issues (the LAC Tax Policy Forum), where senior fiscal policy officials of LAC countries can engage in dialogue with experts from the relevant OECD Committees and other regional organisations. This dialogue is supported by the development of internationally comparable data (e.g. the Revenue Statistics in Latin America publication), capacity building workshops and analytical papers that complement fiscal policy discussions. A third line of work consists of assisting countries with the design and implementation of fiscal reform measures.

Other key features of the LAC Fiscal Initiative:

• It is part of a broader OECD programme (the LAC Initiative) which fosters policy dialogue in the LAC region covering  several other areas beside fiscal issues - investment, public governance and innovation policies.
• It is a joint project between the OECD Centre for Tax Policy and Administration (CTPA) and the Development Centre (DEV) who work in close co-operation with key regional partners in the LAC region, especially CIAT, ECLAC and IDB.
• It is a demand driven programme - several Ministers of Finance in the LAC region expressed interest in working with the OECD on fiscal policy issues - which meets the specific needs of LAC countries by combining regional and country by country approaches.
• It is financed by voluntary contributions from OECD and participating countries.
  

Outcomes

1) Creation of a regional forum for fiscal policy dialogue:

• The inaugural meeting of the LAC Tax Policy Forum was held in Panama City (Panama) on 16-17 September 2010; it was attended by over 60 experts, including representatives of the Ministries of Finance and/or Tax Administration of 14 Latin American and Caribbean countries and several OECD countries. It focused on the role of the tax system in reducing income inequality and promoting social cohesion, and served to identify tax incentives as the new priority topic.
  

2) Tools to facilitate policy dialogue:

• New Revenue Statistics in Latin America publication: this joint publication by CIAT, ECLAC and the OECD was launched in Santiago (Chile) on 25 January 2012 at the ECLAC’s XXIV Regional Seminar on Fiscal Policy. It aims at helping fiscal policy dialogue and the assessment of alternative fiscal reforms by providing internationally comparable data from 1990 to 2009 on tax levels and structures for 12 representative countries of the region (Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Mexico, Peru, Uruguay, Venezuela), including data at sub-national government level. The publication follows the model of the OECD Revenue Statistics database, which enables meaningful cross-country comparisons about tax levels and structures not only between LAC economies, but also, for the first time, between them and their industrialised peers.
  A web platform to share this database and to foster virtual dialogue on fiscal issues has also been developed.
  

• Capacity building workshops and Seminars: several technical workshops and seminars for LAC fiscal officials have also been delivered as a complement for tax policy discussions. 

• Seminar on Tax Policy Modeling: Mexico-OECD MTC, Mexico City, Mexico 8-12 March 2010. See the list of participants and agenda.
• Micro-simulation analysis and forecasting (CIT, PIT, VAT) workshop: Le Meridien Hotel, Panama City, Panama, 13-15 September 2010. See the list of participants and agenda.
• Seminar on Fiscal Federalism: Spanish Cooperation Training Centre (AECID), Cartagena de Indias, Colombia, 2-5 November 2010. See the syllabus and agenda/presentations.
• Micro-simulation tax modelling workshop (CIT, PIT, VAT): Escola de Adminstração Fazendária (ESAF), Brasilia, Brazil, 17-21 October 2011. See the list of participants and agenda.
  

• Publications on fiscal policy issues: several papers produced under the LAC Fiscal Initiative will contribute to the debate on fiscal policy in Latin America.
  
  
  • Working paper on Fiscal Policy in Latin America
  • Working paper on Taxation and More Representation

3) Assistance in the design and implementation of reform measures

• On a demand driven basis, two LAC countries have been assisted in the process of reform of their fiscal rules, analysing their budgetary position taking into account the business cycle and commodities prices.
  
  

Upcoming activities

• Second edition of the Revenue Statistics in Latin America. OECD, CIAT and ECLAC are producing a second edition that will add 3 new countries to the previous 12 already included in the first edition. The aim is to publish this report on an annual basis so that it becomes a regular point of reference for fiscal policy makers in the region.

• Second meeting of the LAC Tax Policy Forum: the next meeting of the LAC Tax Policy Forum will take place in Colombia on 12-13 July 2012 and will focus on the issue of addressing tax incentives (in particular those designed to attract foreign direct investment) and informality, to support fiscal consolidation.

Further information

• A more detailed description of the LAC Fiscal Initiative: the programme’s rationale, OECD value-added, the LAC Initiative, the fiscal pillar of the LAC Initiative (main drivers and launch, objectives and instruments, partners, country-specific and regional approaches, original structure), and about the abovementioned outcomes of the pilot phase of the LAC Fiscal Initiative.
  
  
• More information on the launching event of the LAC Fiscal Initiative, at the II International Economic Forum for Latin America and the Caribbean in Paris on 25 January 2010 which was attended by Ministers of Finance from the LAC region, OECD member countries, heads of international organisations, fiscal policy think-tanks, and representatives from 23 countries.
  
  
• Flyer of the LAC Fiscal Initiative.

Contact us

Any questions relating to the LAC Fiscal Initiative should be addressed to Mr. Jaime Mas (Tel: +33 1 45 24 78 43 - Email: Jaime.Mas@oecd.org)