Tax Reform for the Improvement of the Country
Introduction
Implementing a tax reform is of the utmost importance for the development and improvement of a country, since, it depends on the impact made by changes and modifications. It is impossible to deny that the State must fulfill its duties with the population, for that it must have the necessary resources, and, its priority is to collect taxes, in order to finance its expenses, which would be as a mandatory benefit that favors to the State. As we know this action affects the impossible or taxpayers in their assets, who have no other option to accept it.
Developing
It is known that fiscal policy serves as an instrument to the State, since through this, the economic development that is expected can be achieved, thus improving the distribution of income and improving the living conditions of those in need. Because of this, there are discussions when giving value to the country’s taxes, since it is not possible to find an efficient and effective response to these variables. This work refers to the Tax Reform of Paraguay, highlighting the modifications made in taxes, proposed for 2020, through Law N.º 6380/10 "Modernization and simplification of the National Tax System".
When we talk about tax reform, we refer to the modification or creation of taxes, the modifications affect everyone, this makes people more interested in goods and services, in order to improve their well -being and economic productivity. The creation of new taxes seeks to simplify their determination, and thus benefit companies and other organizations. To carry out a good job with the tax reform, an explanatory investigation must be done with a good approach in order to analyze the initiative in accordance with the planned laws and from there diagnose positive economic effects.
Gomes and others claim that "this work is due to an explanatory investigation with a mixed approach in order to analyze the incidence according to tax reform 1819 of 2016, seeks to diagnose economic effects". At present, the country seeks to optimize and increase the creation of taxes with the implementation of the new tax reform, which was approved through Law N.º 6380/19 "Modernization and simplification of the National Tax System". This standard created and modified taxes, established changes are of great importance, since, the improvement of the country depends on them.
Through this, Paraguay took a fairly important leap in what are the tax rules, where it puts competitiveness and transparency first, this makes the country adapt to the demands of the world. The current tax reform modified income taxes, VAT generalization, the rectification of special regimes, the improvement of real estate tax collection, tax creation and the elevation of the selective consumption tax rates. It is very important to improve the economy, a new reform makes the distribution of public load more fair.
This leads to creating new more efficient and better quality rules for the improvement of the economy. With the implementation of the tax reform in Paraguay there are several changes, some positive and other negatives. The classified themes had great changes with the implementation of Law N.º 6380/19 "Modernization and simplification of the National Tax System", which was of great impact on the modification of the reform. The most important issue to discuss is about taxes, since with the new reform, and, with the modifications made, it is worrying for all those who are obliged to pay them.
Also for the State, since, in order to fulfill its mission with the population, it must have the necessary resources to do it. Contreras et al. 77) affirm that "the State needs financial resources to fulfill its mission in society, therefore, it is a coincidence that taxes are currently a topic of discussion in academic and political circles". The economy of a country is important for its growth by which it is in need of a new general budget with the implementation of reforms or making adjustments in it.
Games and others affirm that "the economic stability of a country is necessary for its development and growth, which makes it necessary to make adjustments to the general budget of the Nation with new tax reforms". With this reform some of the taxes are simplified and others increase their rate, which is a benefit to those companies that stop submitting taxes so that the procedure is easier or easier in the tax system. In order to simplify or facilitate the taxation of the economic sectors, territorial taxes are gathered to the income of commercial, industrial or Iracis and agricultural income activities Iragro.
Thus creating the IARE Income Tax of the Companies by maintaining the tax rate of 10%. The Paraguayan source concept is extended, admitted deductions are reduced as well as transfers prices, the residual value of assets is stable, the drag of tax losses is allowed up to 5 years. The application on dividends and profits made available to natural persons is simplified, a new rate of imposition to residents is applied reaches the rate of 8% and non -residents of the rate of 15%, the law implies that credits given to shareholders will be considered distribution of dividends.
Except the corporate purpose of the Paraguayan entity as long as the credit does not exceed 2% of its loan portfolio. Non -Resident Income Tax (INR). It is a separate tax, which taxes the activities carried out by non -residents, physical or legal persons in Paraguay, included in IRE and IRP. Activities in relation to digital services are taxed only if they are used and used in Paraguay in that way they will be subject to INR. The tax rate is 15%. Value Added Tax (VAT). You can deduce up to 30% of the VAT credit by providers services.
Public transport companies will be exempted from this tax, VAT settlement will be carried out monthly, both in debit VAT and Credit VAT. Tax rates remain in force, the general rate is 10% and 5% basic basket, housing rentals and others. VAT will be applicable to agricultural products exporters. Personal Income Tax (IRP). Modifications were made, clarifying doubts about the tax obligations of the IRP, the derived income depart from capital income, both are obtained by natural persons having the purpose of resuming the more equitable tax.
conclusion
The IRP reaches people whose income exceeds GS. 80.000.000 per year. The tax rate will be 8% to capital income and 8% to 10% to income for personal services. Selective consumption tax (ISC). Maximum tobacco tax rates have been increased, they can be modified spend a year after validity, it cannot be less than 18% and will not be able to exceed 27%, alcoholic beverages whose rates are between 5% and 13% According to the type of alcoholic graduation.
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