Análisis estratégico sobre institucionalidad, economía y desarrollo publicados en medios especializados.
Latin America's economic history is a long argument with geography. The region has always been close to something valuable: first European demand for silver and sugar, later U.S. industry, and more recently China's appetite for copper, soybeans and oil. What it has rarely managed to do is turn that proximity into a durable increase in productivity.
Paraguay's greatest fiscal asset is not a new tax. It is the existing tax structure: a 10% VAT, a 10% corporate income tax, and a 10% personal income tax.
This series began by asking why a country can appear stable and yet still leave people struggling to make ends meet each month. It concludes here, in Chapter 12, with the only thing that matters when there are no more prologues left: how to make the macro level impact the micro level, what needs to be changed, how, and in what order. Without that sequence, the 4.2 percent of GDP—the figure the BCP is projecting for 2026, following a 2025 figure of around 6 percent—will continue to shine in the monetary policy report but not in households.
The Selective Consumption Tax (ISC) does not only tax final consumption; it also applies to production inputs such as fuel, machinery, and certain intermediate goods, driving up the costs of transportation, production, and final prices. The proposal calls for restructuring the ISC, reducing tax rates on non-luxury goods, and reserving the heaviest tax burden for consumption with negative externalities or luxury goods, with the aim of expanding the formal economy, broadening the VAT base, and increasing tax revenue without increasing the tax burden on production.
The Paraguayan economy is growing, but not at the same rate across the entire country. While national poverty fell to 16% in 2025, the rural areas have a poverty rate of 22.1%. This gap reflects disparities in access to credit, infrastructure, formal employment, and costs that hold back rural development.
Architect of Latin American economic development.
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