At the beginning of the year, the new Personal Income Tax (IRP) of Paraguay came into effect with a charge for prizes exceeding 500 thousand guaranis (about 70 dollars) in casinos, lotteries, sports betting, bingo, raffles and in other game modalities.
On December 30, 2019, the Executive issued decree 3184/19, which defined that premium billings above 500 thousand guaranis would be received by the IRP as capital gain from this year.
The rule establishes that companies that perform these types of games need to withhold tax from the source when paying the prize money. In addition, the 8% rate will be charged on top of the total amount allocated to the beneficiary.
At the same time, according to the determination of the National Economic Team (EEN), the Government of Paraguay tends to maintain the reduction of the rates of the Selective Consumption Tax (ISC) referring to the commercialization of alcoholic beverages and to imported products related to the sector of tourism. The purpose of this governmental measure is to try to leverage the national economy.
Government of Paraguay tries to leverage the economy with new measures
With the new Personal Income Tax, combined with other taxes on financial transfers and charges related to streaming services, the State Secretariat for Taxation (SET) aims to help in the process of recovering the loss of almost 117 million dollars, which generated a gap of 5.4% last year.
It is worth noting that this decline in the country’s economy is directly related to the pandemic of the new coronavirus and all the restrictions imposed for its containment, as well as limitations at the global level.
According to local health agencies, Paraguay recorded about 109,000 positive cases with 2300 deaths.
