Senator Ovelar proposes raising Paraguay corporate tax to USD 600 million

Senator Silvio ‘Beto’ Ovelar has proposed increasing the corporate income tax (IRE) from 10% to 14% to boost state revenue. He estimates this four-percentage-point increase could generate between USD 500 million and USD 600 million annually.

The proposal is being discussed within the framework of the 2027 National General Budget. Ovelar suggests these funds are necessary to address salary demands from various sectors, including medical professionals currently engaged in strikes, as well as staff at the Social Security Institute (IPS).

In addition to corporate tax, there are discussions regarding increasing the selective consumption tax (ISC) on tobacco, alcohol, and sugary drinks. While some legislators argue that Paraguay has one of the lowest tax burdens in the region, the President of Congress, Basilio ‘Bachi’ Núñez, has expressed opposition, arguing that tax increases are ultimately passed on to citizens and small businesses.