El Salvador achieved the highest tax burden in Central America at the close of 2025, with tax revenues reaching 22.1% of Gross Domestic Product (GDP). According to the Executive Secretariat of the Central American Monetary Council (SECMCA), total collection climbed to $8,108.2 million, marking a $505.8 million increase from the previous year. This performance placed the country ahead of regional peers like Nicaragua (20.5%) and Honduras (17.2%), while Panama registered the lowest ratio at 8%.

Rather than introducing higher tax rates, officials fueled this revenue surge through continuous enforcement operations targeting tax evasion and smuggling, alongside tax amnesty programs and the widespread adoption of electronic invoicing. SECMCA noted that the government’s parallel objective focuses on “broadening the tax base by incorporating small businesses and the informal sector.”

The bulk of the fiscal intake remained heavily concentrated in core economic channels, with Value Added Tax (VAT) and Income Tax generating 87.5% of all tax receipts. This revenue expansion reflects broader momentum across the domestic economy, aligning with the 3.9% economic growth recorded by the Central Reserve Bank (BCR) for 2025.

Across the broader region, fiscal outcomes remained mixed throughout the year. While El Salvador, Nicaragua, Guatemala, and Panama expanded their tax-to-GDP ratios, Costa Rica and Honduras experienced contractions of 0.6 and 0.4 percentage points, respectively, highlighting diverging fiscal dynamics across Central America.