“We will pursue people who evade taxes”: Paraguayan new finance minister

Benigno López, half-brother of President-elect Mario Abdo Benítez, took office on Thursday as finance minister and announced the continuity in public finances

"We will pursue people who evade taxes": new finance minister, Benigno López

Last month, the current president of Paraguay, Mario Abdo Benítez, appointed his maternal half-brother, Benigno López, as finance minister, who took office on Thursday, August 16.  In his inaugural speech he centered around a mission continuity in the area of public finances of Paraguay, an area that is facing challenges with regard to tax collection and an imbalance in the pension funds. López will continue with the deputy ministers who accompanied Lea Giménez, who preceded him in the position.

Leer en español: "Perseguiremos a las personas que evaden impuestos": nuevo ministro de Hacienda de Paraguay

"The first thing we must do is follow and build on the good that was done, there are good things that were done in the macroeconomic sector, such as having an independent, credible, transparent Central Bank and a responsible Ministry of Finance," said López, who saw with favorable eyes the work of the previous Ministry.

Tax evasion and labor informality in the sights

Benigno López, who is member of the Colorado Party of Paraguay, said that the priorities of the incoming Ministry will be to fight tax evasion and labor informality. As reported by the newspaper ABC of Paraguay, these problems are creating a fiscal imbalance in the center of the Paraguayan government

For the government of Abdo Benítez, fixing this fiscal imbalance is more a matter of increasing the base of taxpayers than of increasing taxes. Benigno López would follow this line and so he said in a statement: "We will pursue people who have informal businesses and those who evade taxes."

In Paraguay, evasion and informality is a big problem. The Paraguayan newspaper reports that the evasion is between 25 and 30%, according to official data, but that in companies of the private sector could reach 40%.

Where does Benigno López come from?

Benigno López is a graduate of the law faculty of the Catholic University of Nuestra Señora de la Asunción in Paraguay. Later, he obtained a master's degree in law at the Georgetown University, in Washington D.C. Before occupying the position of finance minister, López was head of the Instituto de Previsión Social. This is a public institution responsible for administering social insurance in Paraguay.

Previously, López served as a member of the board of directors of the Central Bank of Paraguay (BCP, its acronym in Spanish), where he began his professional career in a lesser position. In his time at the BCP, he was part of the negotiation that resulted in the first issuance of Paraguayan government bonds in 1999, which at the time were quoted at 400 million dollars.

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López also worked in the private sector, mainly for banking, taking over several banks in liquidation such as Multibanco, Corporación Financiera, Banco Aleman and Financentro. In addition, he led the government's investigation against the Union and Oriental banks, which diverted 16 million dollars while they were in the process of liquidation.

Before leading the Instituto de Previsión Social, López was a legal advisor for Itaipú Binacional, the organization that oversees the operation of the Itaipú hydroelectric plant, the second largest in the world.

Despite being halfbrother of the new president of Paraguay, both he and President Abdo Benitez, argued that the decision to appoint López as finance minister can not be classified as nepotism.

Benigno López explained in an interview with the 780 AM radio station, that the crime of "special treatment of family members" only happens when the election is the product of unfair competition, that is, electing someone less qualified for public office only because of their family ties with who appoints the position.

"The president is my brother, but far from being an advantage, far from being an officer with a crown, it is an even greater responsibility. There is no preferential relationship, the yardstick will be the same or greater than the other members of the Cabinet, " Lopez said in his speech on Thursday.


LatinAmerican Post | Pedro Bernal

Translated from ""Perseguiremos a las personas que evaden impuestos": nuevo ministro de Hacienda, Benigno López"

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