Paraguay
Paraguay has an estimated 300,000 registered taxpayers, of whom only 1,500 actually paid taxes in 2004. Additionally, smuggling is a rampant problem, as is the length and cost of the business registration process. Paraguay signed a $34.65 million Millennium Challenge Corporation Threshold program to initiate a multi-sectoral attack on corruption and create conditions conducive to economic growth and business development in Paraguay.
Threshold Program Overview
The Government of Paraguay has requested MCC assistance to fund ten specific initiatives in two broad areas over 24 months, highlights of which are listed below:
Strengthening the Rule of Law:
Increase the Investigative Capability of the Public Ministry (equivalent to U.S. Department of Justice)
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Modernize and strengthen technical, scientific, and human resources in the Public Ministry.
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Produce more reliable evidence through specialized analysis.
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Strengthen safeguards for the handling and storage of evidence.
Increase the Capacity of the Judiciary Disciplinary System
Strengthen the Supreme Court's Superintendence Council ( Consejo de Superintendencia ) through the creation of a system of internal controls and disciplinary measures to hold those involved in corruption accountable.
Strengthen Internal Government Auditing Systems and Civil Society Participation in Oversight Activities
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Adopt an efficient and transparent internal and external control system in the Controller General's Office.
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Promote oversight activities carried out by citizen watchdog groups.
Improve and Protect Integrity of Documents held in the Public Registry
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Network and integrate the databases of the Motor Vehicles Registry, the Judiciary Court Records Registry and the Department of Identification of Persons Registry.
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Strengthen the System of Registration and Identification of Persons to maintain a more reliable system of personal identification.
Increase Transparency and Effectiveness of Public Finance Legislative Oversight
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Improve the efficiency and transparency of Congress's system of analysis and oversight of budgetary executions by public entities.
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Make information more accessible to the public in order to promote citizen oversight.
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Establish mechanisms that promote coordination on public budget oversight among Congress, other branches of government, the Controller General's Office, and interest groups from civil society.
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Increase the ability of members of Congress to represent the interests of their electoral constituencies in public budget issues.
Building a Transparent Business Environment
Increase Operational Efficiency and Transparency of Government Tax Authority
- Simplify, standardize, and expand the use of documents verifying sales in order to reduce informal business transactions and increase tax payment compliance.
Strengthen Border and Customs Controls
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Improve land and river border patrolling by creating a special rapid deployment unit.
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Monitor goods being transported within the national borders, through a system that will deter the smuggling of contraband.
Increase the Ministry of Finance's Internal Investigation Capabilities
- Develop and strengthen the agencies tasked with investigating customs fraud.
Design and Implement “One Stop Shops” and Call Centers to Facilitate the Legal Establishment of New Businesses
- Facilitate the legal establishment of new businesses and regularization of unregistered businesses.
Promote Investment in Maquilas (duty-free assembly for re-export).
- Formalize the registration of business in the tri-state region (border area where Brazil, Argentina and Paraguay meet) through the maquila regime. Maquilas are businesses with low cost structures, simplified businesses processes, and international customers.
Expected Results
Fighting Corruption
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Increase the percentage of disciplinary measures, cases and accusations investigated and submitted to the Public Ministry and the Jury for the Prosecution of Magistrates
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Increase the number of audits yielding punishable offenses or administrative misconduct that are submitted and investigated by the Public Ministry and Congress
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Achieve a level of 20 public agencies subject to the budget execution and legislative oversight system from a current baseline of zero
Business Development
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Reduce from 74 to 36 the number of days to start a business.
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Increase from 38 to 53 the number of maquilas installed as a consequence of promotion activities.