Raising VAT from 12% to 15% and lowering income tax from 35% to 30% are part of the reforms that the Executive Branch is preparing to present to Congress.
Preliminary ideas being prepared by President Morales and a group of advisers also include incorporating the concept of world income.Although a formal document has not yet been submitted, the Executive has already started to give details of the proposal to members of Congress.
With the recent consent given by the Banguat for a new issuance of new debt totalling $1,917 million to finance the 2015 budget, the fiscal deficit could exceed 2.5% of GDP.
The private sector is not looking favorably on the approval given by the Monetary Board of the Bank of Guatemala for the possible issuance of $1.917 million in debt to finance part of the 2015 expenses, because the fiscal deficit would rise to levels above that considered acceptable in economic terms.
A study reveals the state's inability to meet the demands for services and road infrastructure that arise when a mining project is set up.
"Mining in Guatemala's economy in 2011 accounted for 2.8% of the production of goods and services nationwide .... By 2012, the total tax contribution of the mining sector was $62,496,766 equivalent to 5.7% of production of mining and quarrying," indicated the Central American Institute for Fiscal Studies (ICEFI).
In late 2013 the fiscal deficit will be 4% of GDP and public debt will have increased to around 58% of GDP.
Elsalvador.com reports that "The Central American Institute for Fiscal Studies (ICEFI) argues that El Salvador needs a sustainable fiscal policy in order to support growth, promote equity and adapt to changing conditions in the international environment. Reform is also required in income, expenses and transparency. "
The Ministry of Government of Guatemala has awarded $5.3 million in contracts for road signs, via 68 separated purchasing acts.
This practice meant that in almost every event there was just one bidder, and that contracts could be awarded in just three weeks, avoiding the greater transparency and control present in a public tender.
While this year the country planned to use 1.4% of GDP on infrastructure investment, El Salvador plans to use 3.1% and Panama 10.8%.
"Of all the countries in the isthmus Costa Rica uses the least amount of government spending as a percentage of gross domestic product (GDP), for investment in infrastructure, according to a study on debt sustainability in Central America, presented by the Central American Institute for Fiscal Studies (Icefi) " reported Nacion.com.
The Central American Institute for Fiscal Studies has highlighted the unsustainability of the fiscal deficit in Costa Rica, El Salvador, Guatemala and Honduras.
Pensalibre.com reports that "... according to the results of a report by the Central Institute for Fiscal Studies (Icefi) submitted yesterday ... Guatemala, El Salvador, Honduras and Costa Rica find themselves with in unsustainable scenarios regarding public debt in the next few years. "
A law in Honduras allows the government to use state resources to raise funds to pay domestic debt.
"The attitude of Congress is irresponsible in dealing with these issues without beforehand consulting taxpayers who pay for these commitments with their taxes , nor conversing with civil society organizations," said Fernando Garcia, director of the National Association of Manufacturers (Andi).
Chicas Vilchez & Ruiz is a professional finance and accounting firm providing Auditing, Consulting, Outsourcing, and Tax services in El Salvador, Central America and the United States.
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Caribbean-Central American Action (CCAA) is a private, independent organization that promotes private sector-led economic development in the Caribbean Basin and throughout the Hemisphere.
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