El Salvador’s tax revenue reached $4.47 billion between January and June 2025, marking a 7.7% increase compared to the same period in 2024. This $320.6 million boost in revenue demonstrates the continued positive trajectory of the country’s fiscal performance, according to official data released by the Ministry of Finance.
This increase exceeds the Treasury’s target by 0.4%, reflecting a healthier fiscal environment supported by a more formalized economy and improved tax collection processes. The uptick is largely attributed to strong performances in Value Added Tax (VAT) and Income Tax (ISR).
In detail, revenue from taxes and contributions totaled $4.31 billion, representing a 7.8% year-over-year rise and surpassing projections by $154.3 million. VAT collections alone contributed $1.88 billion, an 8.2% increase driven by a rise in both import-related VAT and domestic tax returns.
- VAT on imports grew by 9.8% to reach $1.02 billion
- Domestic VAT returns rose by 6.4%, generating $864.4 million
Income tax remains the top revenue source, bringing in $2.02 billion, a 7.3% increase over the previous year. Within that:
- Income tax returns grew by 8.6%, totaling $802.4 million
- Withholdings increased by 7.4% to $821.7 million
- Advance payments reached $399.8 million, up $16.7 million
Other taxes also saw significant growth:
- Import duties increased by 11.5% to $178 million
- Excise taxes (on alcohol, tobacco, and soft drinks) totaled $120.1 million
- Miscellaneous taxes (e.g., real estate and insurance) surged 16.5% to $62 million
Special contributions, including those related to road infrastructure, public transportation, and tourism promotion, totaled $41.8 million, reflecting 3.5% growth. Additionally, non-tax revenues, such as fees and service-related income, reached $160 million, up 6.9%.
According to the Ministry of Finance, this upward trend strengthens the government’s ability to fund the $9.66 billion National Budget for 2025, supporting social programs, public investment projects, and enhancements in public service delivery.
Marvin Sorto, Director General of Internal Revenue, highlighted that these results represent the institutional commitment to efficient and transparent fiscal management, aimed at fostering long-term economic and social development in El Salvador.
The monthly breakdown of tax revenue during the first semester shows consistent performance:
- January: $741.4 million
- February: $574.9 million
- March: $622.9 million
- April: $1.26 billion (peak due to tax return deadlines)
- May: $654.2 million
- June: $615.6 million
El Salvador’s improved tax collection performance in 2025 is seen as a sign of economic resilience and a more accountable public sector, contributing to broader efforts to ensure sustainable growth.
