Why do most Bolivians need to pay taxes?

El Diario released very important information: a well renowned international financial organization has finally addressed a critical situation for our country, it is time that the majority of our citizens behave like grownups and comply with laws and begin to pay taxes!!

Presented the report of economy and development

CAF recommends to extend the payment of taxes to different sectors

We analyzed aspects of the functioning of the taxation systems of the countries of the region.

The Corporación Andina de Fomento (CAF) – Latin America Development Bank, through the eighth edition of its report of economy and development (RED), entitled public finance for development: strengthening the connection between income and expenses, points out that tax payment should be extended to more people for a better development of the economic policy of the country.

The representative of the CAF, said yesterday that this does not mean the expansion of a tax basis in terms of fiscal policy, but explained that the taxable amount should be more broad, i.e. that subjects susceptible to pay taxes, should be more.

“Not only look at large companies that actually have to pay income, they have to be natural and legal persons in greater numbers, in larger quantities so that they can be the reflection of a dynamic that we are working”, said.

The presented document that addresses the main challenges of public finances faced by States in the region to promote economic growth with social inclusion, points out the collection of taxes, as a central theme.

“The theme of the collection of taxes in the countries in which the expansive policy of spending has had greater impact on growth, comes from a larger tax base.” i.e. payment of taxes is done upon admission, not only by companies, but the population in general. “The broader productive sectors imply necessarily the dynamic growth over the longer-term, more quality, more inclusive and generator of jobs,” said Lenné.


In this regard, the Economist and editor of the first chapter of the document, Pablo Sanguinetti, asserts that to generate better governance, that will increase the budgets and expenditures in development, it is also important that citizenship is aware that there is a basic connection between taxes and fees. “Expenditure must depend on how taxes were paid or not”, he said. [to be clear: do not spend if you don’t have the taxes to pay for that specific activity, which in most cases, any government tends to do just to gain political favor, vis-a-vis votes]

“It has to become palpable that idea that the taxes that I pay, will determine which services will get to the citizens.” “Through better quality of expenditure, more quality tax, if people pay more taxes will require better government quality of management”, Sanguinetti said.


The document submitted yesterday, explained that the Government has to decide between two types of taxes, namely: general taxation to consumption (e.g. VAT) and the income of persons. This could mean a political cost, i.e. less electoral support, by a greater tax burden on the population, which is explained by lower disposable income that generate these taxes and costs that may need to incur the voters to comply with tax requirements. [a-priori, neighborhoods in El Alto, Plan Tres Mil and Chapare must pay more; and if you look at it closely, you’ll find that those ‘social sectors’ and citizens who are more prone to go on strikes and blockade our roads and streets are in fact those who pay little or anything…]

However, this taxation is necessary for a better quality of life, better services and better management of resources.


The study, involving a team of researchers from the region, brings arguments and evidence explaining the central role of public finance in the development with equity of Latin American countries.

The hypothesis raised by research is that there is a strong interdependence between the decisions on taxes and spending and the generation of a virtuous circle that leads to higher levels of fundraising, allowing States to provide a greater quantity and quality of public goods to populations.

Also various aspects of the functioning of the taxation systems of the countries of Latin America such as tax structures, their participation in income, levels of evasion, the efficiency and redistribution of social expenditure programs are discussed throughout the report.


We SHOULD listen to CAF and do accordingly!!


Published by Bolivian Thoughts

Senior managerial experience on sustainable development projects.

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