- Proposal for Personalized VAT Regime: Uruguay’s Ministry of Economy is proposing a personalized VAT regime, building on initial support from the Inter-American Development Bank in 2022, with the official proposal presented on January 8, 2025. The reform aims to expand the tax base, establish a single VAT rate of 21%, and offer targeted electronic VAT refunds to the lowest-income 30% of the population.
- Key Challenges for Implementation: The shift to a personalized VAT system will necessitate significant technological and administrative enhancements, including electronic transaction tracking, e-invoicing integration, protection of personal data, and identification at the point of sale using tax ID numbers.
- Potential Impact and Modernization: If successfully implemented, Uruguay could become a pioneer in personalized VAT systems, setting a precedent for global tax modernization while addressing public acceptance and administrative complexities associated with tracking individual spending habits.
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