The results are conclusive: according to a study by Inter-American Centre of Tax Administration, (CIAT in Spanish) Paraguay ended the year 2020 with the best domestic consumption index of the whole South American continent.
This performance relates to value added tax (VAT), which is applied (even if in a small part than for example in Europe) on daily purchases, imports and production factors. In Paraguay the consumption index reached up to 2,4% and it was the only positive result in South America. Only Tobago and Trinidad had a better result than Paraguay.
According to studies and statistics by CIAT, pandemic completely stopped the country above all in the first half of 2020, registering a passive in monthly payments.
The situation started to improve at the beginning of the second half of 2020, reaching annual increases up to 13,4% in November 2020 and 17,7 in Dicember 2020. Accounts returned fully to surplus, so Paraguay was the country with the best consumption index in the year 2020.
The document drawn up by CIAT says that, even if it represents a minority among the analized countries, it is fully highlighted the relative resistance of this tax, since of course on his collection weights the pandemic, which also contributed to ensure that the total collection did not exceed the registered one. And it happended in Tobago, Trinidad, Paraguay and Mexico.
The Paraguayan Deputy Minister for Taxation Óscar Orué pointed out the efforts made by the entire Government to reach this very positive and reassuring result and presented the adopted strategy to boost consumption. Firstly, tax reduction for tourism sector, at 1% and 5% for food, tourist events and manifestations. This contributed to facilitate imports, reduce prices and so increase sales.
In addition, the Government has implemented the registration activities, with persuasion and operational control and, at the end it gave a powerful impetus to public works, which led to a substantial increase of material and equipment purchases.
Finally, the CIAT report affirmed that Paraguay was one of the countries less overwhelmed by the non-recovery of taxes in year 2020.
At this point what to say?
We say that Paraguay continues to welcome all foreigner people applying for permanent residence, because they want to live, work and enjoy their pension in this wonderful South American country.
And LIP is at their side to support them in this new adventure.
Living in Paraguay is the only European certified company specialized in obtaining your permanent residence in Paraguay. It is registered in Estonia, the most digitalized country in Europe and all its contracts are registered and guaranteed by European Union.
With Living in Paraguay you can also sign your contracts and receive advice on line.
The skilled consultants of Living in Paraguay will accompanying you step by step to help you to do all the paperwork you need to change your residence. Moreover, they will accompanying you during an explorative fly to Paraguay, so that you can see up close in concrete terms how your new life will be.
Paraguay can really offer you very much: for professionals VAT is at 10% and they can use their qualification with no need of a validation on the spot, while pensioners can enjoy their tax-free pension!
The natural beauty of this country, the mild climate all year long, the friendliness and the hospitality of Paraguayan people will deeply amaze you and will make you a good impression!
