The Bolivian Sales Tax (IVA)

Whether or not you pay a Bolivian sales tax when you go shopping will depend on where you are shopping, what you are buying, and who you are buying it from.
The Bolivian tax on transactions is called the IVA (Impuesto al Valor Agregado – or Value Added Tax, in English). Basically, it all boils down to this: anyone who sells anything should pay taxes to the government on the income they earn from the sale. However, as you’ll soon learn, the IVA is a far more complex matter in Bolivia. I’ll try to explain in the most uncomplicated manner possible.
For all practical purposes, what you need to know is that there are two types of commerce: what we typically call formal commerce and informal commerce.
Formal commerce includes all businesses that have registered with the government, have a Tax I.D. number and pay taxes on each sale made. In order to show how much they’ve earned, ideally they are supposed to issue an invoice (sales receipt) each time they make a sale. The Bolivian sales tax they charge you is then paid once a month to the government. Many of these businesses import the products they’re selling you – they pay import taxes on those products as well, prior to selling them to you and me.
Informal commerce includes all businesses that have not registered with the government, do not have a Tax I.D. number and do not pay taxes on each sale made. Technically this is not legal, right? Let me explain:
Many businesses “import” products without paying import taxes. This means they’ve found a way to obtain the product without taking it through customs. You would think these products (frequently called “black market” products) would be sold only in outdoor markets and in a clandestine manner, but you’d be surprised how many formal businesses actually acquire their products this way too. Stores or vendors who sell this type of product are part of the “informal” commerce that exists in Bolivia.
But, in addition to these, many stores, vendors, outdoor market vendors, and sidewalk vendors sell products that are not imported – they are manufactured in Bolivia. Nothing illegal about that. However, they have not registered with the government to sell anything (ideally everyone should) and therefore, do not pay taxes to the government.
Because both types of “informal” vendors have not paid taxes to the government (either in the form of an import tax or a sales tax) they cannot charge you a Bolivian sales tax either. And, because they are not registered with the government, they are unable to provide an invoice (sales receipt) to their customers. Once in a while the government will send out inspectors to randomly close down informal businesses. But this happens infrequently.
Why has the government turned a blind eye to informal business for so long? Probably because without informal commerce thousands of people and families would have no income at all, and without other viable income and job opportunities to offer them, the government has been slack about making these vendors pay the Bolivian sales tax.

Source