Bolivia is embarking on a bold economic transformation, signaling a decisive break with the policies of the past and aiming to restore investor confidence, stabilize public finances, and welcome the world back to its borders. In a flurry of announcements this December, President Rodrigo Paz Pereira and his administration have unveiled sweeping tax reforms, a dramatic easing of visa restrictions for key countries, and a candid reckoning with the nation’s precarious financial reserves. The measures, while ambitious, reflect the urgency facing South America’s poorest Spanish-speaking country as it grapples with dwindling foreign currency, years of fiscal deficits, and a battered reputation among international investors.
On December 5, 2025, President Paz stood before workers at the state utility ENDE in Cochabamba and laid out a plan to abolish four low-yield taxes that, he argued, have done more harm than good. Chief among these is the gambling tax, a levy that has long weighed down Bolivia’s tiny regulated gaming sector. Also on the chopping block are the financial transactions tax, a tax on business promotions, and the wealth tax introduced by Paz’s predecessor, Luis Arce. According to the Ministry of Economy, these four taxes together account for less than 1% of Bolivia’s total tax revenue—hardly enough, Paz contends, to justify their administrative cost or the chilling effect they have on investment.
“We are removing taxes that scare away investment and barely contribute to the budget,” Paz told ENDE employees, describing the planned repeal as part of a shift towards a “simpler, more predictable” tax system that keeps capital inside the country. Economy Minister José Gabriel Espinoza echoed this sentiment, noting that receipts from the gambling levy haven’t even been sufficient to fully fund the national regulator, the Autoridad de Fiscalización del Juego (AJ). The government’s hope is that by reducing the tax burden and streamlining the system, Bolivia can finally stem the tide of capital flight—an estimated US$7 billion has left the country in the past six or seven years, according to official figures.
The changes are especially significant for Bolivia’s regulated gambling market, which has remained minuscule under the weight of heavy fiscal and regulatory demands. Recent analysis suggests that only one operator currently holds a full license, while dozens of unauthorized venues continue to operate in the shadows. Industry observers believe that abolishing the gambling tax could make the regulated route more attractive for both domestic and foreign operators, especially if the AJ also simplifies licensing. Lower headline tax pressure, they argue, may also strengthen the regulator’s hand against the grey market by narrowing the cost gap between compliant and informal businesses. However, the government has yet to publish detailed fiscal projections on how much revenue will be lost from the gambling levy’s removal or how it will ensure the AJ remains properly funded once the tax disappears.
The tax overhaul is just one prong of a broader economic reset. Paz’s administration has also announced plans to slash public spending by at least 30% in the 2026 General State Budget and reduce the number of ministries from 17 to 14. Officials frame this twin strategy of lower taxes and leaner government as essential to stabilizing public finances, easing pressure on foreign-exchange reserves, and rebuilding credibility with investors after years of high deficits and costly fuel subsidies. “The state needs to spend less and spend better,” Espinoza said in a recent briefing, arguing that a slimmer budget will give Bolivia more room to honor its debts and finance productive investment rather than current spending.
Critics, however, are not convinced. Opposition lawmakers and some social groups warn that sharp spending cuts combined with tax reductions could squeeze already fragile public services unless the government can quickly unlock new investment and growth. They also question whether removing the wealth tax so soon after taking office sends the right signal in a country with deep inequality. The administration’s gamble, then, is that a friendlier investment climate and a more open economy will generate enough momentum to offset the pain of austerity.
Nowhere is Bolivia’s economic fragility more apparent than in its international reserves. On December 5, David Espinoza, the new president of the Central Bank of Bolivia, delivered a sobering report on the state of the nation’s finances. He revealed that six tons of Bolivia’s international gold reserves are currently used as collateral for debt in six foreign banks located in Germany, the United Kingdom, and the United States. Most of Bolivia’s gold is held abroad rather than in domestic vaults. The Central Bank, he said, has had to buy gold domestically and export 56.3 tons in recent years just to obtain foreign currency and meet immediate liquidity needs.
Espinoza warned that the fiscal policy of the previous administration had left Bolivia “on the brink of a hyperinflationary spiral,” reminiscent of the economic chaos of the 1980s. International reserves totaled $3.277 billion as of December 3, but only about $75 million is liquid foreign currency. That’s a stark drop from $709 million in 2022, and today, Espinoza estimates, the country is “near $50 million.” The Central Bank’s figures also show that Bolivia has recorded 11 consecutive years of fiscal deficits, with the deficit reaching approximately $7.22 billion by the end of Arce’s administration in October 2025. There are also concerns about “atypical operations” involving 6.6 tons of gold used without regulatory clarity, which the new administration is now investigating.
These alarming numbers have underscored the urgency of restoring confidence in Bolivia’s economy—and for President Paz, that means opening the country’s doors to the world. On December 1, in a move that made headlines internationally, Bolivia lifted visa requirements for citizens of Bulgaria, Israel, Malta, Romania, South Africa, South Korea, the United Arab Emirates, and the United States. Travelers from these eight countries can now enter Bolivia with only a valid passport for stays of up to 90 days, without the hassle or cost of a visa. It’s a sharp reversal from the policies of the past two decades, when anti-U.S. sentiment and suspicion of foreign influence ran high under former president Evo Morales.
“We need to rebuild global confidence in Bolivia as a welcoming and safe destination,” Foreign Minister Fernando Aramayo said as he announced the changes, according to the Associated Press. The government estimates that Bolivia forfeited roughly $900 million in tourism revenue since visa rules were introduced in 2007 and now projects an additional $80 million in earnings over the next four years from the new open-door policy. The move is also part of a broader political and economic realignment with the United States after years of mistrust and diplomatic estrangement.
For a country overshadowed by its more heavily visited neighbors, Brazil and Peru, the hope is that easier access will help jump-start Bolivia’s tourism industry and bring in much-needed foreign currencies—especially U.S. dollars, which are in critically short supply. The visa change is also a symbolic step, signaling that Bolivia is ready to re-engage with the world and chart a new course after years of isolation and economic mismanagement.
Bolivia’s new leadership faces daunting challenges: depleted reserves, a legacy of fiscal irresponsibility, and a public wary of further austerity. Yet the recent flurry of reforms, from slashing taxes to welcoming tourists, marks a clear attempt to break the cycle and invite new opportunities. Whether these bold moves will be enough to turn the tide remains to be seen—but for the first time in years, the world is watching Bolivia with renewed interest.