How can Latin America and the Caribbean strengthen their capacity to cope with increasingly frequent crises and move toward more inclusive and sustainable development? This was one of the questions that brought together authorities, specialists, representatives of international organizations, academia and civil society members at the 38th Regional Seminar on Fiscal Policy, held May 4–6 at ECLAC in Santiago, Chile, with financial support from the Spanish Agency for International Development Cooperation (AECID).

Against a backdrop of high global uncertainty, participants agreed that fiscal policy plays a key role in helping countries in the region weather crises, drive growth, and reduce inequalities. Topics such as financing sustainable development, strengthening tax systems, public investment, and subnational finances were analyzed, with particular emphasis placed on the importance of strengthening international cooperation to build more robust fiscal systems.

One of the highlights of the meeting was the presentation of the Fiscal Panorama of Latin America and the Caribbean 2026, which analyzes recent trends in public finances and warns of limited fiscal space and higher financing costs for countries. The report highlights the need to strengthen fiscal institutions, improve debt management, and incorporate innovative financing mechanisms to protect public investment and social spending.

This year, this flagship publication for the region also delves deeper into two key issues for the region. First, it introduces a novel methodology to identify and quantify tax expenditures linked to social objectives in 12 countries across the region. These instruments represent an average fiscal cost of 1.81% of GDP, equivalent to 42% of total tax expenditures, highlighting the need for stronger evaluation mechanisms to assess their effectiveness. Second, the report presents recent estimates of personal income tax noncompliance in five countries (see the chart below), using a harmonized methodology. The findings reveal significant tax gaps, meaning that countries are losing substantial potential revenue.

Latin America (5 countries): personal income tax non-compliance rate and tax gap, 2023 or the most recent year for which data is available

Source: ECLAC (2026), Fiscal Panorama of Latin America and the Caribbean 2026.

The seminar also served as a platform to present new key publications. Revenue Statistics in Latin America and the Caribbean 2026 shows that tax revenues recoveredin 2024 reaching a regional average of 21.7% of GDP. In addition, two new ECLAC working papers were released, titled “Fiscal Strategies Aimed at Addressing Climate Change and Environmental Protection in Latin American and Caribbean Countries” and “Tax Incentives Related to Environmental Sustainability in Latin America and the Caribbean: Regional Context, Recent Experiences and Perspectives” which explore how fiscal policy can help address climate change and promote environmental sustainability in the region’s countries.

The seminar’s conclusions confirm that fiscal policy will continue to be a decisive tool for addressing the region’s economic, social, and environmental challenges. The reports and studies presented offer evidence, analyses, and concrete proposals for moving toward more resilient, equitable, and sustainable fiscal systems, making them essential reading for understanding the current challenges and opportunities for transformation in Latin America and the Caribbean.

The seminar’s conclusions confirm that fiscal policy will continue to be a decisive tool for addressing the region’s economic, social, and environmental challenges. The reports and studies presented offer evidence, analyses, and concrete proposals for moving toward more resilient, equitable, and sustainable fiscal systems, making them essential reading for understanding the current challenges and opportunities for transformation in Latin America and the Caribbean.