Paraguay’s Tax Collection Exceeds Expectations
Paraguay’s National Directorate of Tax Revenues (DNIT) recently revealed that their tax collection for the previous month had far surpassed expectations, showing a remarkable 9.1% year-on-year improvement. The DNIT report indicated that they had amassed ₲ 3.19 trillion (around US$ 405 million) in revenue, exceeding the previous year’s figure by US$ 33.9 million.
Director Óscar Orué expressed satisfaction with the results, noting, “We closed quite well. In the budget, we projected a 7% increase, but we exceeded our expectations.” Orué emphasized that 45% of the collections were from customs taxes, while the remaining 55% came from internal taxes, predominantly indirect taxes.
Notably, Orué highlighted a streak of 16 consecutive months of growth without any deficits, attributing this success to a combination of technology integration, skilled human resources, enhanced control measures, and the unwavering support of President Santiago Peña. The positive momentum from December carried over into January, particularly benefiting the trade and financial sectors.
In 2024, the DNIT achieved a record collection of ₲ 38.9 trillion, marking a significant 20.6% increase compared to the previous year. Since its establishment in August 2023, the DNIT has garnered ₲ 6,663,866 million more (approximately US$ 948 million) through improved customs oversight and management.
Meanwhile, Paraguay’s Central Bank reported a 1% inflation rate for January, with the overall 2024 inflation rate at 3.8%. Looking ahead to 2025, the Central Bank has set a target inflation rate of 3.5%.
The Consumer Price Index (CPI) remained relatively stable due to significant fluctuations in specific categories. Vegetables saw a sharp 24% increase, while fresh fruits experienced an 8.5% decrease, resulting in an 11% overall inflation rate for fruits and vegetables. Meat prices rose by 1.5% in January, contributing to a 12.4% increase over the past year.
Core inflation, excluding volatile items like food and energy, saw a modest 0.5% rise in January and a 3.4% increase over the last twelve months.
In conclusion, Paraguay’s exceptional tax collection performance reflects robust economic management and strategic policy decisions. The positive trends in revenue growth, coupled with controlled inflation rates, bode well for the country’s fiscal health and economic stability in the coming year.
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