Bolivia’s government will apply in 2021 a tax on those whose wealth exceeds 30 million Bolivians (about 4.3 million dollars), the Minister of Economy and Finance, Marcelo Montenegro, informed Friday.
In an interview for the Bolivian TV channel UNITEL, the minister said that the newly elected government is working on the scope of this tax, which was announced by the new Bolivian President, Luis Arce, during his political campaign.
Montenegro explained that “it is a tax on large fortunes” and would impact at least 150 people, achieving a potential collection of 100 million Bolivians (14.4 million dollars).
According to the Minister of Economy and Finance, Bolivia is one of the countries in Latin America with a considerably low tax base, meaning tax revenues are minimal.
The tax had been announced by Arce since the beginning of his campaign and was ratified after his victory in the general elections on October 18. However, he clarified that it would be applied to personal assets and not to companies to avoid the private sector’s complications and prevent decapitalization.
Arce has commented that the tax’s purpose is to generate new sources of income from those who have more and give to those who have less.
Financial analyst Luis Ballivián said this Friday to Xinhua that applying a tax on those who have more money would be a wise measure and that it would have, above all, a component of solidarity with the less favored.
A former official with the Central Bank of Bolivia (BCB) considered that such tax would significantly contribute to the country, which faces a deep economic crisis caused by the COVID-19 pandemic.
Ballivián commented that if the new government’s idea is to capture more income and create a new tax, it would also be prudent to analyze the situation of other sectors that handle large sums of capital.