Paraguay would stop receiving around 500 million dollars a year in revenue if a trade agreement with China is finalized, warned the director of Customs, Julio Fernández.
According to the figures for 2022, Paraguay raised $507,626,837 for trade with China.
In this sense, Fernández pointed out that among 42% and 45% of tax revenueThose from Paraguay come from foreign trade.
Hence, he warned that to compensate the tax hole Because of a possible trade agreement with the Asian giant, which would imply fewer tariffs, the Paraguayans should sell China more than 50,000 million dollars a year.
This figure represents “more than 100% of its gross domestic product (GDP)” of the country, which is located around 40,000 million dollars.
“In other words, our GDP must double to only compensate for the loss in fiscal matters,” added the head of Customs, who pointed out that Paraguay doubled its GDP in constant terms in a period of 27 years (1994-2021).
Currently, the official pointed out, Paraguay buys about 3.7 billion dollars from China and charges a rate of around 18%.
“We will have an avalanche of more products of Chinese origin, because we must discount the tariffs. This would force many companies out of the production business, ”he mentioned when weighing another of the effects of a possible agreement.
In statements collected this Sunday by a local media outlet, Fernández estimated the loss at 200 million dollars a year “for sacrificing ties with Taiwan” in favor of consolidating it with China.
Paraguay is one of the 14 countries with which Taiwan maintains official relations.
The President of Paraguay, Mario Abdo Benítez, will make an official visit to Taiwan from next Wednesday to Saturday, with an agenda that will include “economic and commercial” issues, according to what the foreign minister of the South American country, Julio César Arriola, told EFE in Asunción.