The Ministry of Finance of Paraguay, headed by Óscar Llamosas, will be in charge of drafting the country’s latest tax reform. Among the problems to be taken into account in 2021, a gambling tax will be reviewed by the State Undersecretariat of Taxation (SET).
Paraguay encountered flat results in October, amid the economic downturn on a global basis, and with devastating forecasts in various Latin American jurisdictions, as it posted $156.7 million in collected taxes, virtually the same as in 2019.
SET estimates that it will earn $213.7 million in November, which would also tie the performance they achieved last year in the same period.
The Deputy Minister of Taxation, Oscar Orué, highlighted in an interview with Radio Nacional del Paraguay that revenues have decreased in the country by 25 percent, although they have fallen by 40 percent in other countries in the region.
Orué said: “Our taxes [aren’t that high] and that also helps people to comply with their tax obligations. It also adds to the flexibilities that we had previously announced and that are currently a great help.”
Orué assured, however, that various steps, including a new gambling tax and a new tax on the income of non-residents for digital services, need to be introduced before they introduce tax reform in 2021.
The executive branch issued Decree 3184/18 on December 30, 2019, which stipulated that income from prizes above $70 will be subject to the Personal Income Tax (IRP). The tax proposed for the new tax reform is expected to become effective by 1 January 2021.