Paraguay industrial sector rejects tax hikes amid fiscal debate

The Unión Industrial Paraguaya (UIP) has issued a formal rejection of proposed tax increases aimed at addressing the state's fiscal crisis. The industrial sector argues that the primary issue lies in inefficient public spending and the postponement of critical administrative reforms rather than a lack of investment. The UIP maintains that there is no moral or fiscal justification for demanding further sacrifices from the private sector until the government demonstrates a commitment to rationalizing public expenditure.

In contrast, economist Luis Rojas suggests that Paraguay's fundamental problem is an insufficient tax base. He notes that the current tax pressure of approximately 11% is too low to adequately fund essential services such as health, education, infrastructure, and security. Rojas proposes increasing tax revenue by reviewing existing exemptions and expanding the tax base to include sectors such as tobacco, income, grain exports, and the financial sector. He also advocates for greater transparency regarding resources managed by binational entities, specifically Itaipú and Yacyretá.

Other legislative proposals include increasing the fiscal deficit to 6% of GDP and projects aimed at cutting superfluous spending to redirect approximately USD 400 million toward priority sectors.