The analysis made by Fusades concludes that the bill aiming to collect tax debts allows assets to be seized before it has been proven that there is a real debt.
From a report by the Salvadoran Foundation for Economic and Social Development (FUSADES):
On April 6, 2016, the Minister of Finance submitted to the Legislature, with instructions from the President of the Republic and making use of the bill bestowed by the Constitution, a draft "Law for the collection of tax debts and fines owed to the State", consisting of 109 articles, divided into five titles.The project is still under study by the Commission of Treasury and Budget of the Legislative Assembly.
The amount paid to the Tax Authority corresponds to unpaid taxes, plus penalties and interest.
An article on Lahora.gt reports that the Superintendent of the SAT, Juan Francisco Solorzano, said that "... It is the largest payment made by any entity, in relation to adjustments that had been made or that had been ordered as a result of a judicial process from which it was ruled that there was tax fraud or tax evasion. "
A warning has been given that over 4000 legal persons are at risk of dissolution for having failed to pay the "single rate" for 10 years.
The General Directorate of Revenue in Panama published the list of legal persons who have arrears of ten (10) years in payment of the tax known as "Single Annual Rate" ("tasa única anual", in Spanish), a list prepared by the DGI for broad dissemination and publication, pursuant to paragraphs 4 and 5 of Article 318-A of the Fiscal Code, amended by Act 6 of 2005 and Act 49 of 2009.
"Of the total potential tax collection from VAT, only 50% is charged, with 19% being lost from exemptions and tax schemes, many without justification, while the remaining 30% is lost through evasion charges."
Payment schedule of liabilities for April 2015 and Tax Memorandum on Fiscal Solvency.
Tax Memorandum by Tezó and Associates:
After several suits claiming the unconstitutionality of Article 57 "A" of the Tax Code which establishes fiscal solvency, this rule is in force, except the paragraph that reads "The Tax Administration will determine the requirements, characteristics and other necessary conditions for obtaining it." , which was declared unconstitutional.
Exporters claim that the Ministry of Finance takes up to 10 months to give credit notes for tax refunds, accumulating a debt of $70 million.
To date the Ministry of Finance has issued $41 million in Treasury credit notes (NCTP) to pay off part of the debt. However, representatives from the Corporation of Exporters of El Salvador (Coexport) state that this type of payment represents a loss for exporters, as NCTP's can be sold but wat a discount of up to 5%.
The Directorate General of Revenue has announced that companies with tax debts more than twelve months old will be included in a list which will be published in March.
The Directorate General of Revenue has announced that it will publish, in the course of this month details of, "... taxpayers who have had outstanding accounts with the institution for more than a year." This measure is a result of low tax revenues being reported since late 2014.
Once it has been enacted by the executive, the moratorium law will be in effect until the last working day of the year and can be exercised by taxpayers who are in arrears up until September 30, 2014.
The law which provides exemptions from penalties, interest or fines was approved on its third reading by the National Assembly of Panama and will become effective one day after its enactment. The beneficiaries are taxpayers in arrears up until September 30, 2014 and those who are in dispute with the Directorate General of Revenue (DGI), the Tax Court and the Supreme Administrative Court.
A waiver of fines, interest and penalties will apply starting June 12th and will run for 90 days for all taxpayers, both natural or legal persons.
Government Agreement No. 174-2014 published in Diario de Centroamérica:
"Article 7. Transient. Regularization. Taxpayers from the term of this Agreement, who elect to regularize operations or modify the method of recording costs and expenses, under this agreement, though the application of the special treatment provided therein and who owe taxes or formal sanctions, may enjoy exemptions from penalties, interest or surcharges in the method set out in this article. "
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.
Operates in El Salvador, Costa Rica, Guatemala, Panama, Honduras and Nicaragua
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