Although a reform reduces income tax (IR) from 1.5% to 1% for transactions of rice and raw milk in the bag, unsatisfied businesses are demanding that more areas be included.
The reform of the Fiscal Equity Act was passed on Wednesday (8th February, 2012) in the National Assembly by 85 votes, the majority of which were from the group of the ruling Sandinista Front (FSLN), and the opposition.
Business leaders see the government’s tax reform bill as insufficient and analysts suggest including more sectors in order to stimulate economic activity.
The Superior Council of Private Enterprise (COSEP) has stated that the tax reform bill that the government has sent to the National Assembly, was not consulted on with the private sector and they consider it "inadequate", reports El Nuevo Diario on its website.
The Executive presented the tax reform bill to the Assembly, which aims to collect $46 million more, or 0.7% of the GDP.
42% of the projected collection depends on the Minimum Payment Tax (IPM in Spanish).
Legislator Eduardo Montealegre spoke about how this tax will impact businesses, "1% IPM over sales is equivalent to 75% of their earnings before taxes. This translates to paying between 75% to 80% earnings tax before taxes", reported Laprensa.com.ni.
As part of the Agritrade Platform, Guatemala will participate for the 27th time in PMA Fresh Summit, the most important international trade show and convention of fruits and vegetables in the United States, which will take place at Anaheim Convention Center, California from October 17th to 19th.
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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