President Santiago Peña reaffirmed Thursday, July 3, that his government does not intend to raise tax rates or create new taxes, as the Ministry of Economy and Finance and the National Directorate of Tax Revenue (DNIT), responsible for tax collection in Paraguay, review exemptions and deductions granted to certain sectors.
Economy Minister Óscar Lovera said the review seeks to make the existing tax structure more efficient. Studies he cited estimate so-called “tax expenditure” — benefits that reduce or eliminate taxes — at about US$1 billion. Lovera stressed that there is still no specific proposal and said that, for now, no changes are planned to the Corporate Income Tax (IRE), Personal Income Tax (IRP) or Value-Added Tax (VAT).
DNIT Director Óscar Orué offered the review of special regimes, such as maquila and free-trade zones, as a personal technical opinion, along with benefits that reduce VAT collection from 10% to 5% on certain goods. The assessment does not represent a formal government decision. Orué said reviewing these rules could increase revenue, but he did not present an approved measure.
The debate comes amid mobilization by doctors, who are demanding a pay increase of 3 million guaraníes per employment relationship. Lawmaker Hugo Meza said he had spoken with Peña and, according to his own account, previewed an executive proposal for the sector. According to Meza, the draft 2027 National General Budget provides more resources for supplies and medicines and for the regularization of nearly 3,000 health professionals. Meza advocated negotiations and said Congress could still seek funding sources for the pay increase.
Lawmaker Rodrigo Gamarra, of the National Republican Association (ANR), also known as the Colorado Party, rejected tax increases and proposed broadening the taxpayer base through greater formalization and incentives for micro, small and medium-sized enterprises. Gamarra cited 121 projects approved in 2025 under the investment incentive regime, totaling US$650 million and more than 4,100 projected jobs. He also mentioned 7,744 new companies and 242,000 jobs.
During the opening of the IV Edition of Siembra de Soja Paraguay 2026-2027 in J. Eulogio Estigarribia, in the department of Caaguazú, Peña said demands for health care, education and security are legitimate, but warned that a higher tax burden could affect production, investment and jobs. The president said he is maintaining this debate with lawmakers, including Senator Silvio Ovelar, and advocated gradual responses to social needs.
The visit was also marked by protests by residents seeking a Social Security Institute (IPS) facility in the city. Demonstrators said more than 3,000 beneficiaries need to travel about 40 kilometers to Caaguazú or nearly 100 kilometers to Coronel Oviedo for care. They also demanded supplies and specialist doctors for the local health center, arguing that Coronel Oviedo General Hospital is far away and overburdened.