At the same time that tax levels have been rising in Latin America, the tax structure (defined as the share of major taxes in total tax revenue) also changed significantly between 1990 and 2012. Table C in the publication illustrates the several trends on “tax mix” that emerge from the data. The most important trends are those related to consumption taxes and taxes on income and profits.

The overall share of consumption taxes remained fairly stable over the period but within the total, the share of general consumption taxes increased considerably by 11 percentage points between 1990 and 2012, while specific consumption taxes saw their share decline by 14 percentage points over the same period. These two opposing trends within consumption taxes are due to the rising importance of VAT and the diminishing role of specific consumption taxes, such as excises and taxes on international trade.

At the same time, revenues from incomes and profits grew from 21% to 26% of total tax revenues, mainly as a result of much higher collection levels in the late 2000s. This growth reflects the sizeable increase in revenues from corporate income taxes, especially from companies in the natural–resources sector.

Turning to the comparison between OECD and Latin American countries, the main difference between the tax-structures of the two groups is immediately apparent. Relative to the OECD, Latin America exhibits a relatively low direct-tax take counterbalanced by high indirect-tax receipts (Chart B of the publication). In particular, Latin America relies heavily on taxes on goods and services, which make up about half of overall tax revenues compared with around 30% in OECD economies.

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