By Hugh Bronstein and Daniela Desantis
BUENOS AIRES (Reuters) - Paraguay will pick a new president in Sunday's election with the ruling Colorado Party expected to keep power but lose seats in Congress, which could complicate its pro-business agenda and raise the risk of higher taxes on the country's key farm sector.
Mario Abdo, a 46-year-old former senator who campaigned for the Colorado Party on an anti-corruption platform, supports current low-tax policies aimed at stimulating foreign investment and agricultural production in Paraguay, the world's No. 4 soybean exporter and a major supplier of beef.
Abdo has promised to fight pressure to raise taxes despite calls from the opposition for a levy on soybean exports. Polls show him 18 to 20 points ahead of candidate Efrain Alegre, a lawyer from the centre-left GANAR coalition.
Outgoing president Horacio Cartes, who tried but failed to change the constitution to allow him to seek a second consecutive term, is running for a Senate seat on Sunday.
Abdo is the son of the private secretary of dictator Alfredo Stroessner, who ruled Paraguay with an iron hand for 35 years. Abdo, who was 16 when his father's regime ended in 1989, vows to respect human rights and democratic institutions if elected.
"My leadership style is not to impose my ideas," he recently said on television.
Grains-dependent Paraguay produced more than 10 million tonnes of soy last year and is trying to attract investment needed to reach its goal of 20 million tonnes by 2028.
Polls say Abdo's party is likely to lose some of the 20 seats it has in Paraguay's 45-member Senate, which last year debated a bill to slap a 10 percent tax on soybean exports.
"The push for an export tax will intensify after the election, which is likely to see the empowering of the Frente Guasu, a major proponent of the initiative, and a party which is expected to substantially increase its presence in Congress," said Thomaz Favaro, an analyst for consultancy Control Risks
Abdo may be forced to support the export tax in order to safeguard other parts of his investment-friendly agenda.
"Uncertainty over the level of taxation for the agriculture industry will thus likely persist in the short-to-medium term," Favaro said.
About 4.2 million Paraguayans are eligible to vote in the election. The new president will take office on August 15.