At the industry day organized by the Industrial Union of Entre Ríos in a Paraná that anticipated spring and looks resplendent, the highlight was a table on taxes, which reveals why where does the worry go of businessmen. The star guest was Carlos Guberman, presented as a trusted man of Luis Caputo and who will soon have to go explain the Budget in Congress.
He was preceded by the president of the UIA, Martín Rappalini, who recalled that Paraguay has a very low tax pressure compared. With his slow tone, Guberman did not let it pass: “ There is talk of Paraguay being cheaper in taxes but also what to think about if we want to have the public services of Paraguay”he blurted out.
The Secretary of the Treasury insisted on what his boss, the Minister of Economy, has already said: “The idea is to reduce taxes to the extent that public accounts allow.”. That did tie him to another condition that few in the Government admit. And it will be done in “as the economy recovers speed.” He was in favor of a tax reform.
In Entre Ríos, Guberman feels comfortable. On Wednesday night he had a long conversation with Governor Frigerio during a welcome meal. After all, they were colleagues in the Macri administration.
This morning, he pointed out that competitiveness is a whole, not just taxes, and he boasted about the elimination of a series of obstacles and regulations.
“Informality is a problem. And there is the responsibility of the national State to ensure that the rules are uniform in taxes and are complied with. The other thing that is clear is that we discussed with the governors what level of spending needs to be financed.
“The national government made the decision to reduce property taxes. Next year personal property expires whose rate has been reduced to 0.25% and we will have to see what decision is made.
“The May Pact that was signed with the governors made the commitment that consolidated public spending cannot exceed 25% of GDP, today it is 30%. There is talk of Paraguay being cheaper in taxes but also what to think about if we want to have the public services of Paraguay.
“We advance into refund balances in favor of taxes in SMEs and large industries, We know that there is a complex situation, we improve to the extent we can. Fiscal accounts are essential. We are cautious in speed with which we are dismantling those stocks because it also impacts the provinces. And to the extent that the economy regains speed.
“Within the 2027 Budget, an improvement is contemplated for developers who take new routes or who decide to expand or build new routes, so that the toll is not so expensive. We lowered taxes but provinces and municipalities took advantage of an additional burden. We want them to accompany us. The first thing is to organize public spending by eliminating functions and areas that do not make sense.
“We have taken measures to facilitate access to credit. The tax burden is high but not national, but provincial and municipal. There is a need to develop the capital market and in that sense the FAL (Labor Assistance Fund) contemplated in the Labor Modernization law, to grow the local capital market. The economy is stabilized, inflation is lower and there will be more conditions for credit. It’s part of a process.
“Competitiveness transcends tax. We deregulate by eliminating the difficulty of importing or those that existed regarding packaging, a whole enormous series of regulations. Progress was made very quickly, perhaps faster than one would like.. The times are not long and comfortable, but it was needed to improve the situation.
“We ares reducing export duties and the check tax. Today 80% of export duties are no longer there. There remains 20% that will be gradually reduced from January 2027. The idea is to reduce to the extent that public accounts provide margin.”