Caribbean governments’ ability to fund public services depends heavily on tax collection, with capacity varying significantly across the region, according to new OECD/IDB analysis. Collection rates range from 30.5% of GDP in Barbados to 10.6% in Guyana, a gap that reflects the region’s diverse economic structures and circumstances.
Several nations, including Jamaica (29.3%), Trinidad and Tobago (23.7%), and Belize (22.1%), operate above the regional average of 21%. Others show different patterns, with the Dominican Republic at 13.9% and Guyana at 10.6%, the latter’s ratio influenced by its rapidly expanding oil economy which grew 62% in 2022 alone.
These variations affect public investment capacity. Higher revenue collection enables greater investment in climate resilience, social protection, and infrastructure, while lower collection rates may constrain these development priorities.
An additional regional consideration is the composition of tax revenues: indirect taxes account for 55% of total collection. This reliance on consumption-based taxes raises equity concerns, as these taxes apply equally across income groups regardless of ability to pay.