The Paraguayan Industrial Union (UIP) rejected the tax increase advocated by sectors of Congress as a way to finance doctors’ salary demands and called for structural public-spending reform. In a statement released on August 30, 2026, the organization said that “the problem is spending, not investment” and said there was no fiscal justification for demanding further sacrifices from the private sector without first rationalizing the state apparatus. The assessment concerning state inefficiency and the lack of rationalization was made by the UIP itself.
The reaction came amid a strike and protests by health professionals, who are demanding better salaries and also reporting shortages of medicines, infrastructure and equipment in public hospitals. Colorado senator Silvio “Beto” Ovelar had suggested raising the Personal Income Tax (IRP) rate from 10% to 14%, while another proposal mentioned in the debate would raise the Corporate Income Tax (IRE) to 15%. The expectation associated with the proposal was to collect between US$600 million and US$700 million, but the supplied sources do not indicate that this estimate is an official projection or that either measure has been formally introduced or enacted.
The UIP called it unacceptable to shift onto workers and companies the cost of what it described as state inefficiency. The organization also said that commitments made since the 2003 reform to improve public-administration efficiency remain unimplemented, and cited the recent failure of an attempt to reform the Caja Fiscal as an example of structural decisions being postponed. The allegations and assessments concerning public administration came from the UIP; the supplied sources contain no response from the government, the Finance Ministry, legislators, medical unions or an independent fiscal expert.
Economic analyst Stan Canova specifically criticized the proposal to raise the IRP. In an interview with Radio 1000 AM, he said the change would represent a 40% increase in the rate and had not been preceded by studies on its impact and scope. In Canova’s view, changing tax policy in response to each salary demand could trigger a domino effect, with other sectors beginning to seek similar financing.
According to Canova, financing salary increases through taxes would depend on turning additional revenue into resources for the health-care payroll; the supplied sources do not include a detailed fiscal design or official confirmation of the US$600 million–US$700 million estimate. Canova also said that the debate over doctors’ pay needs to consider the full structure of their contracts. Based on Law No. 7,137/2023 and Resolution No. 2,851/2025 of the Ministry of Health, he explained that a “vínculo” is a contract or a 12-hour weekly workload. According to his description, a doctor with six to 10 years of experience may receive about G. 5.9 million per vínculo; four vínculos would amount to 48 hours a week and approximately G. 24 million per month, excluding possible private-sector earnings. That figure therefore does not necessarily represent a general physician salary.
Canova did not challenge doctors’ right to better conditions and salaries, but argued that the government should also examine the administration of health-care resources. The UIP, for its part, called for a debate on public-spending reform and reiterated that it would not support legislative initiatives to raise taxes while concrete rationalization measures are absent. The dispute could affect fiscal credibility, public-sector labor costs and the business environment in Paraguay, but the supplied sources do not measure those effects or indicate the government’s official position.