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Paraguay tax chief calls for review of low-tax maquila scheme
🇵🇾 Paraguay /Economy & Trade

Paraguay tax chief calls for review of low-tax maquila scheme

From ABC Color · () Spanish

Translated from Spanish and summarized by DistantNews. Read the original for the full story.

At a glance

News Named sources Ongoing story
  • Paraguay’s tax chief, Óscar Orué, said the country should review incentives that allow maquila companies to pay a single tax equal to 1% of total turnover.
  • The sector exported $858.7 million through July, up 32.1% from the same period in 2025, with Brazil taking 61.4% of exports under the regime.
  • Orué opposed raising the value-added tax, while lawmakers and President Santiago Peña have resisted broader tax increases and called for spending cuts instead.

Paraguay’s maquila companies pay 1% of their total turnover under a special tax regime, and the head of the country’s tax authority now says that arrangement needs a fresh look.

It is time to review.

— Óscar OruéThe tax chief’s assessment of Paraguay’s maquila incentives.

“It is time to review” the benefits, National Revenue Directorate chief Óscar Orué said in an interview with Radio Monumental. He noted that maquila companies do not pay value-added tax, income tax or tax on profit distributions. Instead, they pay a single tax equivalent to 1% of turnover.

The call comes as Paraguay debates how to raise revenue. Public-sector doctors recently completed five days of strikes seeking salary adjustments and other measures, while proposals to increase taxes became public last week. Orué rejected raising the value-added tax, saying it would be regressive, hurt consumption and add to inflation. The Central Bank of Paraguay expects inflation to end the year at 3.3%.

A maquila contributes 1% of its turnover, pays no VAT, no income tax and no tax on profit distributions. These are three taxes it does not pay. It only pays a single tax of 1% of its turnover, and I believe it is time to review this.

— Óscar OruéOrué explained why he believes the current maquila tax structure should be reconsidered.

He also said any tax increases should follow deep technical studies. House Speaker Raúl Latorre, a member of the governing party, opposed higher taxes and said officials should first examine where they could eliminate unnecessary spending. President Santiago Peña rejected tax increases in March to finance the public pension system or settle government debts with suppliers.

Before touching taxes, we need to look ten times over at where else we can cut waste in terms of unnecessary spending.

— Raúl LatorreThe House speaker argued against raising taxes and called for spending reductions.

The maquila sector exported $858.7 million through July, a 32.1% increase from the same period in 2025. Brazil bought 61.4% of goods exported under the regime, followed by Argentina with 14.6%, the Netherlands with 8.6% and the United States with 4.2%. The sector grew 331% between 2016 and 2024, helping make it a focus of efforts to attract foreign investment.

As long as I am president, I will not propose or discuss raising taxes. I believe there is still a lot of waste to cut in public administration and inefficient spending.

— Santiago PeñaThe president’s stated opposition to tax increases.
About this summary

Originally published by ABC Color in Spanish. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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