The new law taxing legal persons which was approved in first debate in the Costa Rica’s Congress, includes a 6 month grace period for MSMEs to exonerate themselves.
The companies classified as micro or small businesses, registered with the Ministry of Economy, Industry and Commerce (MEIC), have a period of six (6) months to process the new tax exemption.
An annual tax of $312 will be created for companies, branches or representatives of foreign corporations, limited liability companies who are in active business.
The tax targets active corporations which undertake some type of commercial business. For inactive companies (not engaged in lucrative activities), the tax is $156.44.
"The bill exempts micro and small enterprises registered as such with the Registry of the Ministry of Economy, Trade and Industry, and who are registered as taxpayers with the Directorate General of Taxation.
With the new taxes the government intends to raise between $200 and $250 million.
What started as a tax to raise funds to fight the insecurity plaguing the country, has ended up become a second tax reform, with a package of taxes to be levied on economic activities.
Taxes on income, sales, and gross financial savings, especially for the banking sector are some of the new taxes that the government has decided to implement, the second time it has made changes in just eighteen months.
Increased public spending in Costa Rica, especially in the payment of wages, has become a threat to the entire economy and should be corrected by cuts or higher taxes.
Overspending in the public sector and in the decentralization of institutions has meant that for the present year, 2011, a higher deficit than ever before in the last ten years has been projected.
The controversial charge on bank transactions of over $3000 is now in effect in the country
Despite the strong opposition generated by the private business sector, Honduran Congress has passed the security tax bill, which applies to some banking transactions. Funds raised will go towards strengthening measures to combat insecurity in the country.
An article in Proceso.hn states: "The fund will be used by a trust which will be administered by government representatives, the business sector and society.
Governments should control tax evasion, expand the tax base and combat corruption, increasing revenue to finance the fight against insecurity.
A statement by the Federation of Chambers of Commerce of Central America (FECAMCO) reads:
THE FIGHT AGAINST DRUG TRAFFICKING AND SOCIAL VIOLENCE DOES NOT SOLEY DEPEND ON MORE TAXES
The social costs that violence and organized crime bring are embodied in several dimensions, among which is the irreparable loss of lives, physical and emotional toll of victims and the costs related to private security in homes or businesses. The current violence that Central America is experiencing has significantly impacted on companies' productivity and has therefore hindered the economic growth of our countries. We therefore condemn all kinds of populist measures that directly affect productivity, competitiveness and economic growth in the region.
A new security tax, which aims to raise $80 million, calls into question a $300 million investment and could result in the loss of 15,000 jobs.
This is according to Jesus Canahuati, Honduran business leader and former president of the Honduran Maquila Association, who added that "several investors who were ready to come to the country have now halted their plans," due to uncertainty generated by the new tax.
The Salvadoran government has submitted a proposal for a tax that is to be applied temporarily, until 2014.
The Treasury hopes to raise $380 million with the implementation of the new tax, which must first be approved by Congress.
If the proposal succeeds, the tax will be charged to businesses and individuals whose property, whether land, livestock or securities, is worth at least $500,000.
With the publication in the official daily newspaper, a 1% increase on income tax (ISR) comes into force.
The amendment to the income tax law adopted by Congress applies only to companies with revenues in excess of $529 thousand (10 million lempiras). The increase will be applicable for the fiscal year beginning in 2011.
"According to the Executive Directorate of Revenue (DEI), the amendment adds 1% to the gross revenue for the tax period and corresponds to physical and legal persons who declare losses for two, three, four and up to 10 years without paying any tax" , noted an article in Elheraldo.hn
Employers are arguing that the new tax on large capital will affect employment generation.
Contrary to claims by President Maurcio Funes that the new tax will not affect the country's economic recovery, employers and economists agree that in the short term it will affect the generation of jobs and cause an increase in the cost of goods and services.
In 2010 the income tax collected from banks rose more than expected
The increase in bank profits last year and the restrictions on deductible expenses in various income sources are the reasons that explain, in part, the observed increase in revenues of the bank tax.
An article in Prensa.com notes: "from the two largest banks in the system alone, the English HSBC and the Panamanian Banco General, the state raised at least 50% of what they had projected in the last tax reform, which was about $80 million."
The 1% increase in the country's tax on income (ISR in Spanish) will apply from the beginning of the 2011 new tax year.
The reform to Honduran income tax law was approved by congress and only applies to companies with revenue above $529,000.
Finance Minister, William Chong, told LaPrensa.hn that, "the reforms do not affect salaried workers... and those that have suffered losses due to natural disasters may be exempt but will have to provide justification".
Beginning April 1st, tourists arriving Islas de la Bahía by air will pay a $ 6 entrance tax.
The new tax, created under Law of the Free Tourist Zone of the Department of Islas de Bahia, ZOLITUR, will be charged by the airport concessionaire, InterAirports.
"The charges are set forth in Article 45 of the legislation, which was approved by Congress and published in the Official Newspaper on January 8th, 2007.