|Quoting MDorBust (Reply 35):|
Put in place large increases in industrial taxes, then offer tax exemptions to companies that undertake civic improvement projects.
The problem would be the usual: General industrial taxes make the production of goods more expensive and are basically an invitation to outsource production to other countries.
Larger enterprises could also keep the production in Bolivia and at the same time found an investment company in a country with low taxes. This investment company would than provide funds neccessary for development and/or production in Bolivia and in return swallow vast amounts of the net income - after expenditures have been deducted from tax in Bolivia. Thus, the company would in fact not pay taxes in Bolivia.
Other (that is: smaller) companies would pass the higher taxes on the price if the market allows them to do. What was meant to be an industrial tax would then turn into a second VAT, a consumer tax. And if the market is not ready for higher prices, many of those companies will simply go bancrupt or leave the country.
It is against this background that I expect industrial taxes to be replaxed with a higher VAT. There have been interesting discussions around that topic lately in at least two countries, Germany and the USA.
Now oil is a slightly different thing than the production of i.e. housewares or cars. Bolivian oil is on Bolivian soil and a higher petro tax will most likely not scare Exxon & Co away. The US American market is nearby, there's no expensive Suez Canal to pass through and so on. With the decrease of oil resources, time is playing into the hands of the Bolivian government anyway.