Uruguay faces 10 billion dollar loss from tax evasion and expenditure

Uruguay faces significant fiscal challenges due to the combined impact of tax evasion and tax expenditure. These two phenomena represent a loss equivalent to 12 percent of the annual Gross Domestic Product (GDP), totaling approximately 10 billion dollars.

Tax evasion is notably low in Latin America for Uruguay, particularly regarding Value Added Tax (IVA). However, the country has one of the highest levels of tax expenditure in the region, ranking second only to Colombia. This expenditure, resulting from tax exemptions, limits the financing available for social public spending.

Specific tax losses include the Corporate Income Tax (IRAE), which sees a 40 percent evasion rate, costing the Dirección General Impositiva (DGI) roughly 1.5 billion dollars, or nearly 2 percent of the GDP. Additionally, IVA evasion accounts for a 2 billion dollar loss.