Bolivia
The country profile includes data on the income taxes paid by workers, their social security contributions, the family benefits they receive in the form of cash transfers as well as the social security contributions and payroll taxes paid by the employers. Results reported include the average and marginal tax burdens for eight different family types.
It also describes the personal income tax systems, all compulsory social security contribution schemes and universal cash transfers as well as recent changes in the tax/benefit system.
The national currency is the Boliviano (BOB). In 2013, the average exchange rate was BOB 6.98 to USD 1. In that year, the average worker earned BOB 40 420.36.
The Report includes estimates of the tax wedge over the whole of the income distribution ordered by deciles of total labour income of formal wage earners derived from the household surveys.
1. Personal income tax system
The tax is paid on a monthly basis and the fiscal year is the calendar year.
1.1. Central government income tax
The complementary scheme to the Value Added Tax (RC-IVA according to its initials in Spanish) taxes personal income, inheritances and gains from both capital and labour. Personal income covers wages, salaries, bonuses, and compensations in money received for the provision of services.
Bolivian-source income is derived from any economic activity using assets located in the country. For tax purposes, the nationality, domicile or residence of the recipient is not deemed to be relevant.
Exempt provisions include:
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The Christmas bonus
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Social benefits
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Birth, lactation, pre-family, wedding, family and burial allowances paid to the individuals according to the social security laws.
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Retirement income, pension income, allowances paid due to illness and work injury allowances.
1.1.1. Tax unit
Members of the family are taxed separately.
Personal income tax applies to both residents and non-residents who derive income in the country.
1.1.2. Tax allowances and tax credits
1.1.2.1. Standard tax allowances and tax credits
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BOB 2 400 (i.e. twice the minimum monthly national wage).
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Employee social security contributions.
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13% of twice the national minimum wage.
1.1.2.2. Main non-standard tax allowances and tax credits
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A value-added credit can be offset against the tax if the proper documentation is presented.
1.1.3. Tax schedule
The tax rate for the complementary scheme to the VAT was 13%:
1.2. State and local taxes
No state or local taxes are levied on wages.
2. Compulsory social security contribution to schemes operated within the government sector
2.1. Employee contributions
Employee contributions are levied on gross wages. The lower earnings threshold was BOB 14 400. The ceiling was BOB 864 000. Mid- and end-year bonuses are exempt from social security contributions.
For employees with earnings higher than BOB 156 000, an additional variable contribution was paid to the Solidarity Fund. In 2013, the schedule was as follows:
2.2. Employer contributions
The schedule for employer social security contributions was as follows.
These employer contributions are levied on the payroll. The lower and upper earnings thresholds are the same as for the employee social security contributions. Bonuses paid to employees are exempt from social security contributions.
3. Universal cash transfer
3.1. Amount for spouse and for dependent children
None.
4. Main changes in tax/benefit since 2013
The minimum wage increased to BOB 1 656 per month for 2015 and consequently the standard income tax allowances and the lower threshold for employee social security contributions were increased.
5. Memorandum items
5.1. Identification of an AW
The data refer to the earnings of workers within the formal sector. The average worker’s wage was calculated using microdata from the national household surveys.