The president of the Corporation of Salvadoran Municipalities and Mayor of Antiguo Cuscatlán, Milagro Navas, said, "We are seeing a recession in all the mayoralties and now we are in trouble and are even considering staff reductions." Her own community has $300 thousand in unpaid taxes.
An article in La Prensa Gráfica described the effect that the situation is having on public works and employment: "Spokespersons for the mayoralties say that the first measure taken in the face of the lack of money in the coffers is the stoppage of projects, no investment in social works and staff reductions."
Up to and including February 2009, tax collection was $436.8 million, compared to $497 million during the same period last year.
The head of the area of macroeconomics for the Salvadoran Foundation for Economic and Social Development, Álvaro Trigueros, informed Elsalvador.com: “The reduction in tax revenues comes from lower collection of the Value Added Tax (IVA), which decreased by $53 million, while import taxes were down by some $10 million. The decline in imports is related to falling oil prices, lower tariffs and generally to a lower economic growth."
The SAT lowered its tax collection goal for 2009 by $441.
For 2009, the Tax Administration Superintendent (SAT) in Guatemala had planned to raise $4.758 billion, but it reported yesterday that the target was adjusted to $4.32 billion, a decrease of 9.28%.
Prensalibre.com reported that the Finance Minister, Juan Alberto Fuentes Knight, addressed the impact on the fiscal deficit: "It would have to be covered by a decrease in operating expenses, plus donations and debt grants pending approval, but it is expected that the aforementioned deficit will remain at 2%."
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