A universal social protection system at the core of a new fiscal pact in Latin America and the Caribbean

This note aims to place the creation of a USPS at the center of the fiscal discussion in the region. To this end, the following section analyzes the importance for the countries of the region to transition to an USPS, to break the trap that combines inequality and low growth, as stated in the United Nations Development Programme (UNDP) 2021 Regional Human Development Report. Trapped: High Inequality and Low Growth in Latin America and the Caribbean. (UNDP, 2021). The third section seeks to highlight the common points of the fiscal systems of the countries in the region in terms of their main sources of inefficiencies and injustices that prevent them from meeting the proposed social protection objectives. The fourth section examines possible paths to increase tax collection in Latin America and the Caribbean. Finally, aspects of political economy related to reforms of this nature are analyzed, and possible strategies to increase their feasibility are proposed. The main source of information on the challenges facing each country consists of a series of studies commissioned by the UNDP Regional Bureau for Latin America and the Caribbean (RBLAC), in which experts from the region delve into the analysis of the characteristics and deficiencies of national tax systems and examine possible specific reforms that each nation could implement to increase taxation by at least 3% of GDP.