In Nicaragua, the government plans to increase employer, labor, and state Social Security contributions, and to approve a tax reform that would increase taxes for medium and large companies.
Although the country has been in a serious economic and political crisis since April 2018, when the government tried to implement reforms to the Nicaraguan Institute of Social Security (INSS), the Ortega administration is once again trying to make changes to the institution, this time through an administrative resolution.
As part of the reform to the tax concentration law cooperatives are calling for the elimination of the retention of 1% per month on their gross income and for a special tax rule to be created.
The Concertación Tax Act indicates that cooperatives are free to pay income tax if their gross annual incomes are less than or equal to $1.5 million. However, this same law also states that 1% must be retained per month in advance even if the stated income level is not reached.
The government intends to review current tax exemptions for several productive sectors.
With the expressed purpose of broadening the tax base and reviewing existing tax exemptions for various sectors, the Minister of Finance, Ivan Acosta announced that a tax reform bill is being prepared.
The project will be submitted to the Legislature in the month of July, including changes to the current ceilings for exemption from income tax for workers.
While other Central American countries are preparing taxes to combat insecurity, Nicaragua declares that it is not an appropriate option.
The president of Guatemala, Alvaro Colom, proposed to his peers in the isthmus region the creation of specific tax to combat organized crime and the violence it generates.
Although the proposal didn’t prosper at the meeting of the Council of Finance Ministers and Central Finance, both Costa Rica, El Salvador and Honduras are working on the implementation of a national tax for their own security plans.
The government is studying charging 1% on each credit card transaction and making it deductible from the Income Tax (IR).
This was confirmed by Alberto Guevara, who added that "It is not a new tax. Businesses accepting credit cards will have to do their Income Declaration anyway, and then this 1% will be deduced from the Income Tax disbursement".
"The head of the Ministry insisted this proposal is being analyzed in order to include it in the Tax Reform Project, which would be sent to the Legislative before October 15th...", reported La Prensa de Nicaragua.