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LatinNews Daily - 29 March 2018

In brief: Mexico

*A report released by the Organisation for Economic Co-operation and Development (OECD) has named Mexico as the Latin American country with the lowest value-added tax (VAT) revenue ratio (VRR) in 2016, at a rate of 32%. The VRR measures the difference between what was actually collected and what the revenue would have been if VAT was applied at the same rate everywhere and all revenue was collected; the regional average was 58%, and Bolivia and Paraguay scored the highest at 91%. The Revenue Statistics in Latin America and the Caribbean report attributed Mexico’s low VRR to exemptions on goods like food and medicine, low compliance, and reduced VAT in border areas. Mexico also scored below the regional average on the tax-to-GDP ratio in 2016, only getting tax revenue equal to 17.2% of the country’s total GDP. The average tax-to-GDP ratio in Latin America was 22.7% in 2016.

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