A video comparing tax burdens in Argentina and Paraguay, posted on social media X, has sparked a heated debate. The video, titled 'Working in Argentina vs. Working in Paraguay: The match we lose by a landslide,' dramatizes the key differences in taxes and labor charges for industry. According to the video, Paraguay offers a more attractive tax regime: for instance, VAT is 10% compared to 21% in Argentina, and income tax is 10% versus 35%. However, many users criticized the simplification of the comparison. They pointed out that social charges also exist for employees in Argentina and questioned why Paraguayans continue to come to work in Argentina. To provide context, it is crucial to consider the development indicators of both countries. According to the UN's 2024 Human Development Index (HDI), Argentina ranks 48th with an HDI of 0.849 ('very high'), while Paraguay is 105th with an HDI of 0.731 ('high'). Furthermore, GDP per capita in Argentina is $13,680, compared to $6,200 in Paraguay. This data suggests that while Paraguay offers a more favorable tax climate, Argentina has a significantly higher level of human development and income per capita, which explains migration patterns and overall quality of life.
