Public incentives and support for production in Uruguay

This document aims to systematize and quantify the incentives and public support granted by the government to the productive sector in Uruguay, being classified and analyzed by area and sector of activity. It is estimated that the resources involved in the general structure of incentives reached US$ 2,414 million in 2017, representing 19.6% of DGI collection and 4.1% of GDP that year. When this figure is broken down by type of support, it is evident that there is a strong concentration in tax exonerations, export tax refunds and employer contributions to social security. When the incentives provided to the productive sector are broken down by sector of activity, it is observed that nearly half of the incentives are allocated to two sectors: 23% of the incentives are allocated to “Primary Activities”, while 22% are allocated to “Manufacturing Industry”. The paper concludes with recommendations on the design of tax incentives and the importance of their evaluation.