All residents of Bolivia are subject to income tax of 13%. Taxable income includes all wages, salaries, premiums, and bonuses, although there are some exceptions. These exceptions are salaries received by diplomats and foreign employees employed by international organizations, and Christmas bonuses.
Sales are subject to a 13% VAT rate to be paid by self-employed on a monthly basis, transaction tax of 3% on each service and corporate income tax of 25%, although up to 50% can be offset by tax credit equal to 13% of the purchase invoices obtained during the tax year — this tax is paid annually.
Bolivia's economy is the 94th largest in the world, according to the CIA World Factbook. Bolivia is classified by the World Bank as a lower middle income country. The local economy has improved in recent years, which has led to major credit agencies upgrading Bolivia's economic rating in 2010. It is also ranked 113th on the Human Development Index.
The range of industries and job types available in Bolivia are varied. Traditionally, Bolivia has been a mining country dependent on its natural resources; however, over time and with development, this has changed. Although there are still many jobs in mining, forestry and agriculture, the options are wider ranging. Manufacturing has a large share of the country's gross domestic product - leading manufactured goods include textiles, clothing, food, drinks and tobacco.
Bolivia's banking service is growing and improving thanks to the 1993 Banking Law. Bolivia has a central bank and nine private banks, and foreign investment in Bolivian banks is allowed.
The energy industry is relatively small but always growing. Bolivia uses mainly oil for its energy needs followed by natural gas and hydroelectric power. Bolivia has its own reserves of oil and gas.
Included in Bolivia's social security system is old-age, disability, survivors, sickness and maternity pensions.
Employers and employees have to make social security contributions on a monthly basis. Since 2010, these social security payments have also applied to expatriates. Expatriates can expect to pay 12.21% to a pension fund and a fixed contribution of 0.5% to the solidarity fund; however, these payments can be transferred to the home country as long as the expatriate ends his or her employment and leaves the country, the expatriate has not accessed his or her pension in Bolivia, and a social security agreement is in effect with the destination country.