Fair and equitable taxation for smallholders in Bolivia

AOPEB (Asociación de Organizaciones de Productores Ecológicos de Bolivia) has 85 member organisations and represents about 70,000 households in Bolivia. AOPEB was founded in 1991 and focuses on the organic production, processing, marketing and capacity building to improve self-sufficiency and food sovereignty of farmers and indigenous communities in Bolivia.

Formally registered economic farmer organisations need to pay value-added taxes on their sales, while they cannot get invoices from their suppliers (smallholder farmers) to lower this tax burden. ESFIM supported research to analyse the tax regulations, reviewing past initiatives and new possibilities to create a mechanism (such as an improved Régimen Agrario Unificado – RAU) that reduces the tax burden of farmers organisations. This will finally improve their economic position compared with competing traders, who often work in the informal economy and pay no value-added tax.

 Outcomes

  • There now are data that can support an efficient proposal for improving the tax system of OECAs and OPEs, based on empirical analysis and the advice of experts in tax law and implementation of tax rulings.
  • Four proposals of differential fiscal treatment have been generated, one for each sector. Nonetheless, the RAU proposal has had priority, since it will benefit all sectors and is not a structural change; rather, it will promote the recognition of the work of the associations and their marketing.
  • Validation of a SMART proposal that reflects the interests and needs of OECAs and OPEs in terms of tax burdens and fiscal procedures, generating improvements in the situation.
  • Generation of a plan of advocacy and communication, based on a systematic stakeholder analysis and the strategies were elaborated by the members.

The main outcome is that the proposal for differential fiscal treatment of small and medium producers has been considered in the conclusions of the economic section, in the national meeting of smallholders convened by president Evo Morales.

Some lessons learnt

  • Socialize more amply the proposals (to more organisations) in order to achieve general representativeness in the relation with the decision-makers.
  • Look for strategic alliances in government
  • Collect more information about the size of the population that can be taxed, their contribution to the Treasury and the potential to increase the number of taxpayers.