RIO DE JANEIRO, BRAZIL – The Bolivian Chamber of Deputies, controlled by the ruling center-left party, on Thursday, December 10th, passed a law to collect an annual and permanent tax on individual fortunes over US$4.3 million. The bill was referred to the Senate for ratification.
The House also passed another bill, calling for the return of 5% of value-added tax (IVAo) on all purchases billed to people with monthly income below 9,000 Bolivianos (about US$1,300 dollars). Both laws were welcomed by President Luis Arce.
“We congratulate the Chamber of Deputies for passing two important bills aimed at reactivating the economy, such as the reimbursement of RE-IVA to workers who receive a monthly salary equal to or lower than 9,000 Bolivianos and the Tax on Large Fortunes (IGF),” Arce said on Twitter.
The rule, according to earlier statements by the Ministry of Economy, establishes a progressive tax base: 150,000 Bolivianos (about US$21,500) for people with wealth between 30 million and 40 million Bolivianos (between US$4.3 million and US$5.7 million).
Similarly, a rate of 600,000 Bolivianos (US$86,200) will be levied on wealth ranging from 40 million to 50 million Bolivianos (US$5.7 million to US$7.2 million). Tax will rise in proportion to the wealth.
The government estimates that the new tax will raise some 105 million Bolivianos per year (US$15.1 million).
Majority party MAS deputy Omar Yujra explained that the new tax will affect 150 citizens in the country, with fortunes in excess of US$4.3 million.
Economist Gary Rodríguez, manager of the Bolivian Institute of Foreign Trade (IBCE), said this week that the new tax “is a sign that concerns local and foreign investors.”
According to right-wing opposition deputy José Carlos Gutiérrez, the revenue produced by the new tax will be allocated to the nation’s General Treasury. “It will feed bureaucracy, when we proposed it should be for healthcare”, he criticized.
Because it is a law supported by the Executive Branch, which currently controls Congress, Senate ratification of the bill is virtually guaranteed.