UGP rejects tax increases: “Not one guaraní more” until public spending is rationalized

“Not one guaraní more.” That is the position Paraguay’s Union of Production Guilds, or UGP, says it will maintain on new taxes until public spending is rationalized.

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Not one guaraní more.

UGP President Héctor Cristaldo restated the group’s opposition during the launch of the new soybean planting campaign in Canindeyú. He said the executive branch had committed not to raise taxes and criticized what he called “populists” in Congress.

Cristaldo argued that raising the tax burden during a period of uncertainty would break with a 2024 agreement to rationalize public spending. He said 22 years had passed without positive movement on that issue. The producers’ group plans to speak with legislators, arguing that higher taxes would slow development, reduce the country’s competitiveness and hinder efforts to cut poverty.

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For the sector, the issue is clear.

The new soybean campaign also faces risks beyond government policy. Producers cannot control the weather, although they try to manage its effects. Cristaldo said an El Niño pattern would be preferable because rain could support production, while La Niña could bring drought and prevent crops from growing.

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We cannot, in this climate of uncertainty, start touching taxes when there is a corresponding agreement from 2024 to rationalize public spending.

The sector expects about 12.5 million tonnes of soybeans from roughly 3.6 million hectares, matching the previous campaign’s estimate. Cristaldo highlighted last season’s strong performance but said sesame and chia are struggling because of international prices and an unpredictable global market. He also pointed to the impact of a weak dollar on producers.

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For us, El Niño is better because if it rains, there can be some production. But if it is La Niña, there is drought and nothing may grow in the fields.