Bolivia President Rodrigo Paz promulgates law to redistribute fiscal responsibilities

Bolivian President Rodrigo Paz has promulgated the Law of Economic Return, a key step in the ‘Agenda 50/50’ initiative aimed at redistributing fiscal resources and competencies. The law transfers the financing of prison inmate daily allowances and health worker vaccination bonuses from departmental governments to the central state, providing an estimated fiscal relief of approximately Bs 209.5 million for the nine regional governments.

Following this, the central government and regional governors have agreed to launch technical working groups on October 5 in La Paz. These sessions will address three primary pillars: the transfer of 15% of tax co-participation to departmental governments, the modification of laws regarding departmental taxes, and the creation of a legal framework for the international relations of autonomous departmental governments.

Regional leaders have expressed varying perspectives on the ongoing fiscal negotiations. Santa Cruz Governor Juan Pablo Velasco supported the recent law as a positive step toward decentralization but emphasized that governors will not accept a tax co-participation lower than 15%. Meanwhile, Cochabamba Mayor Manfred Reyes Villa has proposed that resources currently managed by the Special Projects Unit (UPRE) be transferred directly to municipalities to better address local infrastructure needs.