On December 5, 2025, Bolivia’s recently elected president, Rodrigo Paz Pereira, announced an ambitious plan to eliminate the country’s gambling tax as part of a broader strategy to remove four low-revenue taxes, reduce public spending, and attract investment to revitalize the economy. Speaking at a gathering in Cochabamba with employees of the state utility company ENDE, Paz revealed his administration’s intention to present a bill to Congress targeting the abolition of the gambling tax, the financial transactions tax, the tax on business promotions, and the wealth tax introduced by former president Luis Arce.
Reports from the Ministry of Economy indicate that these taxes collectively contribute less than 1% to Bolivia’s total tax revenue. President Paz argued that the minimal financial benefit of these levies does not justify the operational costs or the adverse impact on investor confidence. “We are removing taxes that deter investment and barely add to the budget,” he explained, emphasizing a shift towards a “simpler, more predictable” taxation framework aimed at retaining capital within the country.
The reform package specifically addresses the elimination of the gambling tax, known as the Impuesto al Juego, the financial transactions tax (Impuesto a las Transacciones Financieras, ITF), the tax on business promotions (Impuesto a las Promociones Empresariales), and the wealth tax on large fortunes (Impuesto a las Grandes Fortunas, IGF). Economy Minister José Gabriel Espinoza supports the proposal, highlighting that the administrative costs of these taxes outweigh their benefits. For example, he noted that the gambling tax does not even generate enough revenue to fully support the national regulator, the Autoridad de Fiscalización del Juego (AJ).
President Paz has connected the wealth tax and other stringent regulations to significant capital outflow, estimating that approximately US$7 billion has exited Bolivia in recent years as investors redirected funds to more stable markets. Official statistics reinforce this point, with net foreign direct investment for 2024 reported at a mere US$247 million, a notably low figure for a country of Bolivia’s size and resources.
The gambling sector faces unique challenges. The proposed abolition of the gambling tax could transform the regulatory landscape, established under the 2010 gambling law, which instituted the AJ as an independent authority under the Ministry of Economy. This law mandates operators to secure licenses for lotteries, casinos, betting shops, and promotional draws. However, the onerous fiscal and regulatory requirements have limited the formal market’s growth. Analyses suggest that only one operator holds a comprehensive license, while numerous unlicensed venues persist.
Industry experts suggest that eliminating the gambling tax could make the regulated market more appealing to both domestic and international operators, provided the AJ also streamlines the licensing process. Reduced tax burdens, they argue, could bolster the regulator’s efforts to combat the grey market by narrowing the price disparity between compliant and non-compliant operators. Nonetheless, the government has yet to disclose detailed projections of potential revenue losses from the gambling tax abolition or plans to ensure adequate funding for the AJ post-tax repeal.
In tandem with tax cuts, President Paz’s economic agenda includes substantial reductions in public spending. His administration plans a 30% cut in the 2026 General State Budget and intends to reduce the number of ministries from 17 to 14. Officials advocate for this dual approach of lowering taxes and trimming government expenditure as vital for stabilizing public finances, relieving pressure on foreign exchange reserves, and restoring investor trust following years of high deficits and subsidized fuel.
Economy Minister Espinoza remarked, “The state needs to spend less and spend better,” asserting that a leaner budget will allow Bolivia to meet its debt obligations and fund productive investments rather than current spending. However, critics, including some opposition lawmakers and social groups, caution that sharp reductions in spending coupled with tax cuts could strain already fragile public services unless the administration swiftly ignites new investment and growth. They also question whether abolishing the wealth tax shortly after taking office sends an appropriate message in a nation grappling with profound inequality.
The debate around these economic reforms underscores a broader discussion about Bolivia’s future trajectory. Proponents argue that reducing tax burdens will incentivize investment and spur economic activity, ultimately benefiting the economy as a whole. In contrast, detractors worry that without carefully considered implementation, such measures could disproportionately affect the country’s most vulnerable citizens and exacerbate existing inequalities. As the proposed legislation moves to Congress, these competing perspectives will shape the discourse on Bolivia’s path forward amid efforts to rejuvenate its economy.
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