According to the ICEFI, "tax incentive policies seem to be a lost opportunity because of permanent tax expenses and the lack of tangible social benefits."
From a statement issued by the ICEFI:
Within the framework of the international meeting on Tax Justice and Transnational Fraud, held in Costa Rica, a study was presented on October 20 entitled 'The effectiveness of taxincentives for investment in Central America' in which an analysis was undertaken of the Central American experience in investment attraction through tax incentives.
Reviewing the regulation on banking secrecy and replacing the board of the SAT with a new Administrative Tax and Customs Tribunal are part of the proposals to improve tax administration in the country.
From a statement issued by the Central Institute for Fiscal Studies (Icefi):
Guatemala.- During the session of the Committee on Public Finance and Currency of the Congress, on February 19, the Icefi participated in a specific working session to discuss amendments to the Organic Law of the Superintendency of Tax Administration (SAT ), during which the final version of the Diagnostic was released and a roadmap proposed for effective tax administration.
A proposal has been made to include new revenue figures, notify companies via email and to make audit processes simpler.
The bill that the Executive Directorate of Revenue has under public consultation envisages changes in the mechanisms through which requests are received or delivered as well as notices regarding tax payments. Laprensa.hn reports that "...
With the reform to the law on Tax Concentration non-resident investors in the country will have to pay 15% instead of 10% on income earned from capital.
According to Juan Sebastian Chamorro, executive director of the Nicaraguan Foundation for Economic and Social Development, the new reform "... is a positive thing for the country because it will generate an increase in the collection of such taxes but is a negative blow to natural and legal non residents because the Revenue Department will no longer deduct 10% on capital transfers, but rather 15 %. "
The average tax burden for the region is 13.4% of GDP, while the average public expenditure increased from 18.7% in 2013 to 19.2% at the end of 2014.
From the Introduction of the report Macrofiscal profiles in Central America, from Instituto Centroamericano de Estudios Fiscales (Icefi):
The fiscal situation has worsened in Central America in recent months, mainly due to a structural lack of sufficient resources to meet the needs of Central Americans and realize many of the commitments made by governments.
A A bill presented in Costa Rica aims to improve tax controls by forcing merchants to accept payments with credit and debit cards.
The bill introduced in the Legislature by the Ministry of Finance, entitled "An Act to improve the fight against fiscal fraud" includes other initiatives such as the imposition of a sales tax on property rentals of less than one month duration.
The president of the Bank of Guatemala has stated that in order to sustain the fiscal debt, the tax burden in the Guatemalan economy will have to rise from 11% today to 14%.
An article on Lahora.com.gt reports that, Edgar Barquín president of the Bank of Guatemala, said "... in order to maintain economic stability and ensure social spending for the benefit of the population, the level of taxes needs to rise to 14 percent of GDP this year. According to the official, rating agencies consistently report that one of the weaknesses in Guatemala, in financial terms, is the low level of taxes."
A potential tax on financial transactions would discourage investment in the stock market as securities would be taxed each time they are traded.
In light of a tax proposal that would tax at 0.25% per $750 all kinds of securities, including repos and securitizations, the Stock Exchange of El Salvador (BVES) has expressed its concern for contracts already traded on the market and its dampening effect on investment.
Warnings have been given that the tax in the approval process in the Legislature would create more evasion affecting all sectors of society.
The new tax would be of 0.25% on financial transactions exceeding $750, applied to the deposit holders who ordered payments or transfers and financial entities performing loan disbursements of any kind.
Added to the normal negative effects of a new tax, such as being an incentive for evasion, discouragement of investment, and in this case generation of inflation, are also "... The ambiguity in the wording ... "it is not clear if this excludes tax remittances, since ' ... the majority of remittances entering the country are money transfers to third parties using an electronic system.'
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