The Paraguayan National Directorate of Tax Revenue (DNIT) announced a significant increase in tax revenue for June 2025 compared to the same month last year. Total revenue for June alone reached $408 million (approximately 3.1 trillion Guaraníes), marking a $56.1 million (16%) increase from June 2024.
Specifically, the cumulative tax revenue for the first half of this year (January to June) totaled $2.7439 billion (approximately 21.3 trillion Guaraníes), an increase of $256.1 million (10.1%) compared to the same period last year. This is attributed to the resilience of the Paraguayan economy and efforts to improve tax administration.
Established in August 2023 to enhance the efficiency of the tax collection system and combat tax evasion and under-declaration, the DNIT integrated the Undersecretariat of State for Taxation (SET) and the National Customs Directorate (DNA). DNIT Director Oscar Orué stated, "We strive for efficient and transparent institutional operations through the correct application of tax and customs laws, encouraging voluntary compliance from taxpayers." The integration of the DNIT has positively impacted tax revenue, even exceeding targets in 2024.
In detail, domestic tax revenue for June amounted to $206.2 million (approximately 1.6 trillion Guaraníes), an 8.7% increase year-over-year. This growth was primarily driven by contributions from various sectors, including commerce, construction, financial intermediation, household services, business services, and transportation. Customs revenue reached $201.7 million (approximately 1.5 trillion Guaraníes), showing a high growth rate of 24.5% year-over-year. This was led by increased imports of key items such as information and communication technology, automobiles, electronics, and fertilizers.
However, the growth rate for the first half of this year is somewhat slower compared to the first half of 2024, which saw a larger increase of 23.8% from 2023. Experts suggest this slowdown in growth could be a base effect following the rapid economic recovery in 2023 and interpret it as part of overall fiscal consolidation efforts. While Paraguay maintains some of the lowest corporate and personal income tax rates (both 10%) and value-added tax (10%) in Latin America, these rates can also constrain government spending on areas like infrastructure investment.
Currently, the Paraguayan government aims to adhere to the fiscal deficit limit of 1.5% of GDP by 2026, as stipulated in the Fiscal Responsibility Law. The solid increase in tax revenue during the first half of this year is expected to be a positive sign for achieving these fiscal consolidation goals. Furthermore, a $30 million loan program from the Inter-American Development Bank (IDB) to improve DNIT operational efficiency is also expected to contribute to increased tax revenue.
Overall, the growth in Paraguay's tax revenue in the first half of 2025 demonstrates its contribution to building a stable fiscal foundation, driven by the DNIT's efficient tax administration and the growth of key economic sectors. Although the year-over-year growth rate has slowed, it is considered a significant step towards sustainable economic development.
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