Bolivia Advances Tax Relief Law to Boost Economic Activity

La Paz, Bolivia – In a significant move to stimulate the Bolivian economy, the Chamber of Deputies has overwhelmingly approved a comprehensive tax relief bill. This legislation, which now proceeds to the Senate for constitutional review, offers a much-needed "fresh start" for thousands of taxpayers burdened by years of accumulated tax debt, including penalties and interest. The bill represents a strategic effort by the government to alleviate fiscal pressure and encourage greater participation in the formal economy.

The core of the approved bill centers on a broad condonation of tax debts. For individuals and legal entities alike, tax debts under Bs 10 million, incurred up to December 31, 2017, will be completely forgiven, encompassing the principal tax amount, fines, and interest. In a notable exception, debts from 2020, a particularly challenging year due to the COVID-19 pandemic, are also eligible for this exceptional "perdonazo" (amnesty). This measure is expected to benefit over 100,000 taxpayers, freeing them from account blockages, asset seizures, and legal proceedings, thereby facilitating their reintegration into the formal economic system.

Minister of Economy José Gabriel Espinoza highlighted the bill's potential to "reorder the relationship between the Government, the tax administration, and the taxpayer." For debts incurred from 2018 onwards, while the principal tax remains, the bill allows for the condonation of fines and interest. Furthermore, it introduces flexible payment plans of up to 36 months, easing the burden on those still facing tax obligations. The legislation also shortens the statute of limitations for tax debts from eight to four years and limits tax audits to more recent periods. This package of reforms signals a clear commitment to simplifying tax processes and fostering a more conducive environment for economic activity in Bolivia.

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It is a measure that will allow a clean slate and reorder the relationship between the Government, the tax administration, and the taxpayer.