Tax Expenditures in Uruguay

Selected Issues Papers, November 4, 2025

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Tax Expenditures in Uruguay

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Bibliographic details

• Authors: Dirk V Muir, Hector Perez-Saiz
• Published: November 4, 2025
• Series: Selected Issues Papers
• DOI: https://doi.org/10.5089/9798229029964.018

Summary and key findings

• With around 180 active tax expenditures and an estimated revenue foregone equivalent to about 6 percent of GDP in 2021, Uruguay has the third highest tax expenditure burden in Latin America.
• The paper investigates the composition and trends of tax expenditures in Uruguay and benchmarks results from a cross-country perspective.
• Many incentives have endured for decades; previous literature suggests a detailed reevaluation of their costs and benefits would be beneficial.
• Macroeconomic simulations suggest that a relatively modest tax reform reducing tax expenditures could create additional space for productive public expenditure and enhance long-term growth.

Composition and trends

• Number of active tax expenditures: around 180.
• Estimated revenue foregone: about 6 percent of GDP in 2021.
• Geographic and topical coverage (as described in subject/keywords): Expenditure, International tax issues, Public financial management (PFM), Revenue administration, Tax expenditures, Tax incentives, Taxes.
• Benchmarks: Results are compared from a cross-country perspective (specific comparative figures are not provided on this page).

Policy implications and simulations

• Recommendation from literature: conduct a detailed reevaluation of long-standing tax incentives’ costs and benefits.
• Simulation result: a relatively modest tax reform reducing tax expenditures could:
  • create additional space for productive public expenditure; and
  • enhance long-term growth.

Publication and metadata

• Authors: Dirk V Muir, Hector Perez-Saiz
• Publication date: November 4, 2025
• Series: Selected Issues Paper No. 2025/143
• Pages: 23
• Volume: 2025
• Issue: 143
• DOI: https://doi.org/10.5089/9798229029964.018
• ISBN: 9798229029964
• ISSN: 2958-7875
• Stock No: SIPEA2025143
• Subject tags and keywords include: Expenditure; International tax issues; Public financial management (PFM); Revenue administration; Tax expenditures; Tax incentives; Taxes; Caribbean; Central America; cost-benefit analysis; Global; IMF country; IMF staff; International tax issues; issues paper; public investment; South America; Subsidies; tax expenditure; tax expenditures; Tax incentives; Uruguay

Source: Tax Expenditures in Uruguay, Selected Issues Papers (2025), Dirk V Muir and Hector Perez-Saiz.

Content in this bundle

• Tax Expenditures in Uruguay; IMF Selected Issues Paper No. 2025/143; October 6, 2025
  • Tax Expenditures in Uruguay; IMF Selected Issues Paper No. 2025/143; October 6, 2025 (Markdown version)
  • Tax Expenditures in Uruguay; IMF Selected Issues Paper No. 2025/143; October 6, 2025 (PDF)