Fitch Recommends Raising Tax Burden in Guatemala

Fitch suggests an increase in tax burden in order to improve government spending and thus achieve higher social spending.

Friday, January 28, 2011

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. "

More on this topic

More Taxes in Guatemala

August 2009

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.

Request for Tax Rise in Guatemala

June 2014

The president of the Bank of Guatemala has stated that in order to sustain the fiscal debt, the tax burden in the Guatemalan economy will have to rise from 11% today to 14%.

An article on Lahora.com.gt reports that, Edgar Barquín president of the Bank of Guatemala, said "...

A New Fiscal Agenda for Guatemala

January 2016

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.

El Salvador Broadens Tax Base

August 2010

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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