We measure the impact of the COVID-19 (coronavirus) crisis and the resulting lockdown on formal firms in Honduras, using monthly value-added tax records for January 2018 to August 2020. Firms' revenue fell by 26 percent, or 342.6 billion lempiras (USD 14.3 billion), in real terms between March and August 2020 and the same period in 2019. Sectors subject to stricter containment measures experienced larger revenue losses. The service sector was the most severely affected, experiencing a 45 percent revenue loss. Larger firms experienced smaller revenue losses than smaller firms, even when accounting for the sectoral composition of firm-size groups. A non-negligible number of firms remained shut down until the end of available data in August 2020.

    Authors

    Anne Brockmeyer
    Anne Brockmeyer

    Research Fellow University College London

    Anne is the research fellow at IFS and an honorary faculty member at UCL. Her work focuses on tax policy in lower-income countries.

    Pierre Bachas
    Pierre Bachas

    Research Fellow World Bank

    Pierre is an IFS Research Fellow and an economist in the Macro and Growth Unit of the World Bank's Development Research Group.

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    Publisher
    World Bank

    Suggested citation

    P, Bachas and A, Brockmeyer and C, Semelet. (2021). The impact of COVID-19 on formal firms in Honduras: evidence from monthly tax returns. Washington D.C.: World Bank. Available at: https://ifs.org.uk/publications/impact-covid-19-formal-firms-honduras-evidence-monthly-tax-returns (accessed: 13 July 2025).

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