Abstract

OLMEDO-BARCHELLO, Selva  and  SCHREINER, Jorge. Effects of Personal Income Tax in Paraguay. Period 2012-2016. Rev. ciente. UCSA [online]. 2022, vol.9, n.2, pp.16-28. ISSN 2409-8752.  https://doi.org/10.18004/ucsa/2409-8752/2022.009.02.016.

The purpose of this paper is to analyze the effects of the Personal Service Income Tax (IRP) in Paraguay in the period 2012-2016. The methodology used was qualitative and quantitative. The methodology used was qualitative and quantitative. To this end, a review of the existing national and international bibliographic collection, as well as secondary data obtained from governmental institutions, was initiated. The study period was from 2012 to 2016. To determine the effects of the implementation of the IRP on the Gross Domestic Product (GDP), Value Added Tax (VAT) and deductible expenses, we proceeded to analyze the impact on VAT collection and the formalization of the economy. The main results obtained indicate that, within the tax structure, the IRP is one of the lowest-collecting direct taxes, representing only 0.1% of GDP.However, indirect taxes such as VAT benefited from a higher collection, a situation that worsened the collection of the IRP as such. Another important aspect is that, in its objective of formalizing the economy, it is not clear as it excludes about 97% of the economically active population. It is concluded that to comply with the objective of equity and social justice, a review of the current legislation and a critical evaluation of its design at the national level are required.

Keywords : effects; personal income tax; collection; formalization; Paraguay.

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