The Path to Improved Tax Collection for Latin America and the Caribbean

Latin America and the Caribbean face a pressing need to enhance tax collection to achieve sustainable development goals and economic equity. With an average tax-to-GDP ratio of 21.5% in 2022, well below the OECD average of 33.9%, the region must address critical gaps in its tax systems.

While much attention has been given to policy reforms, a significant opportunity lies in leveraging advanced software solutions like IVIX to uncover hidden or under-reported revenues within existing tax regulations—allowing governments to dramatically improve audit and collection performance without requiring additional staffing resources.

The Challenge of Hidden Tax Revenues

Across Latin America and the Caribbean, significant portions of taxable revenue remain uncollected due to:

• Informal Economies: Many businesses and income sources operate outside the formal tax system.
• Emerging Sectors: New economic activities, such as e-commerce, cryptocurrency, and short-term rentals, often lack robust oversight.
• Tax Evasion and Underreporting: Gaps in enforcement allow certain taxpayers to underreport income or evade taxes entirely.

Traditional tax collection methods struggle to keep pace with these challenges, leaving billions in potential revenue untapped. This lost revenue grows year over year, creating an urgent need for innovative solutions that maximize the efficiency of existing tax authorities.

How Technology is Transforming Tax Collection

IVIX provides cutting-edge technology that enables governments to identify hidden or under-reported taxable revenues at scale. By harnessing advanced data analytics and open-source intelligence (OSINT), IVIX empowers tax authorities to monitor and expand compliance using existing resources across diverse and rapidly growing sectors. Here’s how IVIX works in key industries:

1. E-Commerce Monitoring

• Challenge: Online marketplaces and digital retailers often lack transparency when calculating, collecting, and remitting taxes, leading to unreported or     misreported transactions.
• Solution: IVIX analyzes transactional data to identify businesses and individuals operating within the e-commerce space. This includes matching sales activity to tax records, flagging discrepancies, and ensuring proper tax declarations—all within the scope of existing tax laws.

2. Cryptocurrency Tracking

• Challenge: Cryptocurrencies pose unique challenges due to their decentralized and pseudo-anonymous nature.
• Solution: IVIX’s purpose-built solutions trace cryptocurrency transactions, including NFTs, to identify taxable events and ensure individuals and businesses report     gains or income from crypto-related activities.

3. Short-Term Rentals

• Challenge: Platforms like Airbnb and Vrbo have created a booming rental market, but many hosts fail to declare rental income.
• Solution: IVIX scans public rental listings, matches property data to existing tax records, and ensures rental income is accurately reported—allowing tax agencies to audit with precision and efficiency.

4. Social Media Influencers

• Challenge: Influencers earn substantial income from sponsorships on platforms such as YouTube, Instagram, and TikTok, but much of it goes unreported today.
• Solution: IVIX monitors social media activity and public sponsorship deals to estimate revenue streams, flagging potential non-compliance for taxable income.     These insights equip tax agencies to improve oversight in this growing sector.

Maximizing Tax Agency Efficiency

What sets IVIX apart is its ability to enhance audit and collection performance without requiring additional staff or resources. By automating the discovery of hidden revenues and providing actionable insights, IVIX empowers existing tax agency teams to:

• Streamline Audits: Prioritize cases with the highest likelihood of under-reported income, reducing time spent on ineffective investigations.
• Expand Coverage: Identify non-compliance across sectors that traditionally evade oversight, such as cryptocurrency and social media.
• Improve Collections: Ensure accurate tax remittance through precise monitoring and validation of taxable activities.

This approach allows governments to achieve greater results with their current workforce, ensuring resources are deployed where they are most effective.

Benefits of Leveraging Technology

By adopting advanced tools like IVIX, Latin American and Caribbean governments can:

• Close the Tax Gap: Identify and collect revenue that would otherwise remain hidden, all within the framework of existing tax rules and laws.
• Enhance Compliance: Increase transparency and reduce tax evasion through proactive monitoring and identification.
• Expand Revenue Streams: Ensure emerging sectors contribute their fair share to the tax base without requiring new legislation.
• Boost Public Trust: Demonstrate accountability and fairness by applying existing tax laws equitably across all sectors.

A Path Forward

Latin America and the Caribbean have an unprecedented opportunity to transform their tax systems and unlock significant revenue potential without the need for immediate legislative overhauls. By focusing on technology-driven solutions, the region can harness untapped revenues while empowering tax agencies to improve efficiency and effectiveness with their current resources.

Platforms like IVIX provide a clear pathway to achieving fiscal health while addressing long-standing challenges in tax compliance. With innovative tools, governments can uncover billions in hidden revenues, reduce inequality, and build a foundation for long-term economic growth.

The future of tax collection in Latin America and the Caribbean lies in the power of advanced technologies like IVIX, and the time to act is now.