Peña Rejects Calls to Raise Taxes in Paraguay Amid Social Demands

Paraguay’s president, Santiago Peña, has rejected proposals to raise taxes, even as social demands and a dispute with public-sector doctors put pressure on the government.

“Everyone knows my position on tax policy in Paraguay. This is a debate I have with lawmakers,” Peña said during a meeting with soybean producers in Caaguazú, in the east of the country. Soybeans are Paraguay’s main export product.

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Everyone knows my position on tax policy in Paraguay. This is a debate I have with lawmakers.

“We cannot, under the argument of responding to a social demand, put at risk those who generate Paraguay’s development and progress,” he added.

Several tax proposals became public last week after public-sector doctors completed five days of strikes seeking salary adjustments and other measures. Paraguay has one of the lowest tax burdens in Latin America.

Óscar Orué, head of the National Directorate of Tax Revenues, said on Monday that the country needed to review benefits under the maquila regime. Companies operating under the regime pay 1% of their total turnover and had exported goods worth $858.7 million by July this year.

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We cannot, under the argument of responding to a social demand, put at risk those who generate Paraguay’s development and progress.

Peña argued that raising taxes had been the formula used by many Latin American countries that now struggle, saying their business owners were crossing rivers, borders and bridges to establish themselves in Paraguay. He acknowledged that the country still owed its citizens and would meet those obligations, but warned against trying to pay them all at once at the expense of those who generate the resources.

In March, Peña also rejected tax increases to finance the public pension system and state debts to suppliers. “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 within the public administration and inefficient spending,” he said.

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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 within the public administration and inefficient spending.