A recent analysis by the OECD and IDB reveals stark disparities in tax collection capacities across Caribbean nations, significantly influencing their ability to fund public services. The study highlights that tax collection rates vary widely, ranging from 30.5% of GDP in Barbados to a mere 10.6% in Guyana. This gap underscores the region’s diverse economic structures and circumstances. Countries such as Jamaica (29.3%), Trinidad and Tobago (23.7%), and Belize (22.1%) exceed the regional average of 21%, while others like the Dominican Republic (13.9%) and Guyana (10.6%) lag behind. Notably, Guyana’s low tax-to-GDP ratio is attributed to its rapidly expanding oil economy, which surged by 62% in 2022. These variations directly impact public investment capabilities. Nations with higher tax revenues can allocate more resources to critical areas like climate resilience, social protection, and infrastructure development. Conversely, lower collection rates may hinder progress in these essential sectors. Another critical factor is the composition of tax revenues, with indirect taxes—primarily consumption-based—accounting for 55% of total collections. This reliance raises equity concerns, as such taxes disproportionately affect lower-income groups, regardless of their ability to pay. The findings emphasize the need for tailored fiscal policies to address these challenges and promote sustainable development across the region.
Antigua and Barbuda’s Tax Collection at 19.1%, Lower Than Regional Average
