Punta del Este Declaration Progress Report. Recognising the special circumstances of Latin American countries, which suffer considerable loss from Illicit Financial Flows (IFFs), the Global Forum, in 2018, together with a number of its Latin America members and technical partners launched a Latin America Initiative, through the Punta del Este Declaration, aimed at helping unlock the potential for tax transparency and exchange of information in the region. The Punta del Este Declaration aims to support Latin American countries in achieving the Sustainable Development Goals of domestic resource mobilisation (DRM) and enhancing their ability to fight against IFFs. These objectives are pursued by encouraging engagement and participation in international tax co-operation and by exploiting the tremendous improvements in global transparency and exchange of information (EOI) for tax purposes, which have occurred in the last years. Tax evasion and other IFFs, such as corruption and money laundering, are among the main obstacles to enhancing DRM in Latin America. The past decade has shown that tax transparency is a potent weapon for tackling these issues. IFFs drain large amounts of financial resources from the region, with a severe and negative impact on the fulfilment of the Latin American development agenda, especially in the COVID-19 pandemic context. On 19 November 2018, ministers, deputy ministers and high-level officials from Latin American countries met on the margins of the Global Forum Plenary held in Punta del Este, Uruguay, recognising that the region faces significant challenges with respect to revenue collection. The participants agreed to establish the Initiative to maximise the effective use of the information exchanged under the international tax transparency standards to tackle tax evasion, corruption and other financial crimes. Latin American countries are committed to reflect on the progress achieved in improving tax transparency in Latin America in an annual report of the Punta del Este Declaration. Political support is key to combating IFFs using the means of tax transparency and EOI. Decision-makers’ understanding of the effectiveness of tax transparency is fundamental to creating the conditions for Latin American countries to benefit from EOI. In addition to ensuring adequate political support, Latin American countries need to establish appropriate infrastructures to implement and benefit from the international EOI standards. Tax Transparency in Latin America 2021 is the first edition of what will be a series of annual reports. The report is part of the various efforts to advance tax transparency and the EOI agenda in Latin America in order to combat tax evasion, corruption and other financial crimes. This report was made possible thanks to the Latin American members of the Global Forum and the various development partners, which contribute to and support the Punta del Este Declaration. Acknowledgements – Tax Transparency in Latin America 2021 consists in the progress report for 2020 of the Punta del Este Declaration, in which 13 Latin American members of the Global Forum participate. The Punta del Este Declaration is supported by partner organisations. This is the first edition of the Tax Transparency in Latin America report to be published. The Global Forum Secretariat expresses its appreciation to the Inter-American Centre of Tax Administrations, the Inter-American Development Bank and the World Bank Group for adding their weight to this report and for promoting the tax transparency agenda in Latin America. Finally, the authors1 are grateful to officials from the ministries of finance and tax administrations of all the 16 Latin American countries, which provided data for producing the report by responding to the 2021 Tax Transparency in Latin America survey. Their efforts in gathering the data and their patience in providing further clarifications have been critical to the quality of this report.
