Guyana’s tax system struggling to keep pace with oil boom

Guyana’s tax system struggling to keep pace with oil boom – new ECLAC report

May 13, 2026 News

(Kaieteur News) – A new international fiscal report says Guyana’s explosive oil production is not only transforming the economy, but also fundamentally changing how the Government earns revenue.

According to the recently released Revenue Statistics in Latin America and the Caribbean 2026 report, jointly produced by the Organisation for Economic Co-operation and Development (OECD), the Inter-American Development Bank (IDB), the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), and the Inter-American Center of Tax Administrations (CIAT), Guyana has become a major driver behind declining tax-to-GDP trends in the Caribbean because the country’s economy is expanding much faster than its tax collections.

Guyana’s tax system struggling to keep pace with oil boom – new ECLAC report

Dr. Ashni Singh, Senior Minister in the Office of the President with Responsibility for Finance.

According to the report non-tax revenues in Guyana have surged sharply between 2019 and 2024 as oil production accelerated.

“Guyana drove the overall decline in tax revenues as a share of GDP in the Caribbean between 2019 and 2024,” the report stated. It added that “non-tax revenues increased strongly in Guyana between 2019 and 2024,” partially offsetting the decline in tax revenues as a share of GDP.

According to the report, traditionally, governments rely heavily on taxes such as Value Added Tax (VAT), corporate taxes, income taxes and import duties to finance public spending. However, Guyana’s oil production boom is rapidly altering that model.

The report explained that Guyana’s tax-to-GDP ratio fell by 2.4 percentage points in 2024 because economic growth far outpaced increases in tax revenue. Oil-related GDP reportedly expanded by 58% in 2024, while non-oil GDP grew by 13%.

The One Guyana Floating Production Storage offloading. (FPSO)

This means that although Guyana may still be collecting more taxes in absolute terms, the economy is growing so quickly due to oil production that taxes now represent a smaller share of overall national output, the report noted.

At the same time, the report suggests that revenues flowing directly from the petroleum sector, including royalties, profit oil and other state earnings classified outside traditional taxation are becoming increasingly important to the country’s finances.

The report noted that the Caribbean region’s average tax-to-GDP ratio declined to 22.3% in 2024, due largely to falling revenues in Trinidad and Tobago and Guyana’s rapid economic expansion.

Guyana recorded the lowest tax-to-GDP ratio in the entire Latin America and Caribbean region at 9.2%, far below the regional average of 21.7%.

The report also warned that commodity-dependent economies remain vulnerable to swings in international energy prices. It noted that hydrocarbon revenues across major producing countries are projected to decline in 2025 because of falling oil and gas prices.

Meanwhile, the publication pointed out that countries across Latin America and the Caribbean continue to lose enormous sums due to tax evasion and aggressive tax planning. According to ECLAC estimates cited in the report, the region lost US$433 billion in 2023 — equivalent to 6.7% of GDP because of tax evasion and avoidance.

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ECLAC report, Guyana’s tax system, Oil boom, ONE GUYANA FPSO

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