This will improve the country´s risk ratings and thus attract investment, said Erick Campos, Executive Director of Fitch.
Sigloxxi.com includes statements from the executive, "Guatemala has maintained a record of good macroeconomic management, which has allowed it to have good credit ratings, but cannot advance any further because social conditions are not the best, so to progress, the State must increase social spending and therefore needs more revenue. "
The Government is requesting approval of a new tax package, for financing increased spending by the State.
The editorial in newspaper "El Periódico de Guetemala", recalls campaign promises by President Colom, of not raising taxes. The government is instead pushing for increases, at a time when tax cuts should be done to fight the economic crisis.
In the opinion of the Central American Institute of Fiscal Studies, the only way to consolidate public finances in a sustainable way is to reduce tax breaks and increase tax collections.
From a statement issued by the Central Institute for Fiscal Studies (Icefi):
The Central American Institute for Fiscal Studies (Icefi) has proposed as a fiscal agenda for development: meeting the public demand for integrity and transparency; effective, efficient and effectual public spending as a tool for inclusive and democratic development; and financial viability with taxation being part of democratic accountability.
With a view to increasing tax revenues, the treasury has presented a plan to broaden the country's tax base.
If the proposal goes ahead, from January 2011 the minimum amount subject to tax on income will be reduced from $316.67 to $209.52.
"According to the Treasury's draft document, employees earning between $209.52 and $316.67 (who are not currently required to pay tax on their income) will have withholdings applied to their pay from 2011. The proposal also suggests getting rid of income tax returns, under the assumption that employees will be taxed exact amounts," writes Daniel Choto for Elsalvador.com.
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