The Bolivian government has proposed sweeping tax reforms, including debt forgiveness for obligations up to 2017, simplified payment regimes for small businesses, and a reduction in VAT from 14.94% to 13%, aiming to transform the relationship between the state and taxpayers while reviving the country's struggling economy.
The Bolivian government introduced the Transparency and Tax Relief Bill on 19 February 2026, marking a significant overhaul of the country’s tax system aimed at helping entrepreneurs and businesses overcome crippling debts and administrative complexity.
President Rodrigo Paz Pereira and Economy Minister José Gabriel Espinoza Yáñez presented the reforms to approximately 650 private sector representatives at the Business Congress in Cochabamba, organised by FEPC.
Simplified tax regime for small businesses
The bill establishes the Special Integrated Transition Regime (Siete-RG) for small businesses with annual sales below BOP 400,000. This voluntary programme consolidates VAT, income tax, and corporate income tax into a single bimonthly payment of 5% of gross income.
Minister Espinoza highlighted that this simplification will make formalisation more affordable while allowing small businesses to issue invoices—enabling larger companies to claim tax credits currently being lost.
Reduced tax statute of limitations
Addressing a major complaint about government overreach, the law cuts the tax statute of limitations from eight years to four years, with legal proceedings limited to two years.
Debt forgiveness and payment plans
The reform offers total forgiveness of tax debts under BOP 10 million incurred through 31 December 2017, including principal, interest, and penalties. For debts from 1 January 2018 onwards, fines and interest will be eliminated, with payment plans extending up to 24 months available. Taxpayers have 120 days after approval to benefit from these provisions.
Transparent VAT reduction
The bill proposes reducing VAT from its current effective rate of 14.94% to a transparent 13%, removing it from invoice calculations. This change simplifies accounting and helps businesses manage pricing more effectively.
