A New Fiscal Agenda for Guatemala

In the opinion of the Central American Institute of Fiscal Studies, the only way to consolidate public finances in a sustainable way is to reduce tax breaks and increase tax collections.

Wednesday, January 20, 2016

From a statement issued by the Central Institute for Fiscal Studies (Icefi):

The Central American Institute for Fiscal Studies (Icefi) has proposed as a fiscal agenda for development: meeting the public demand for integrity and transparency; effective, efficient and effectual public spending as a tool for inclusive and democratic development; and financial viability with taxation being part of democratic accountability.

At the start of its term, the new government enjoyed favorable macroeconomic conditions for growth and confidence of voters and economic agents. However, this trust translates into very high citizen expectations that the Icefi warns contrast with an acute fiscal crisis, limiting the resources need to keep campaign promises and the government's obligations. The new authorities will find the SAT in a serious institutional crisis after the corruption scandal of "La Linea", a floating debt inherited from 2015 on top of insufficient revenue which has caused a "fiscal hole" in 2016. In addition, the health system is also in a serious crisis, a risk of potential ungovernability comes on top of tensions because of unpaid wages and other shortfalls in the budgeted expenditure for the first year in office of President Morales.



More on this topic

Costa Rica's Fiscal and Political Sickness

October 2016

The ICEFI points to a "chronic political inability to achieve comprehensive fiscal agreement" which is jeopardizing the sustainability of the state in the medium and long term.

From a statement issued by the Central Institute for Fiscal Studies (Icefi):

Honduras Fiscal Outlook - September 2016

October 2016

The ICEFI highlighted the achievement in reducing the fiscal deficit, but noted "weaknesses in access to information and opacity in the management of public resources."

From a statement issued by the ICEFI:

The Icefi is concerned about the tax changes in recent years because part of its impact is an increase in the regressivity of the tax system, less fiscal space for social spending, as well as a latent opacity in the discussion on the use of State property and new fiscal institutions.  These negative effects detract from the achievements made in terms of macro-fiscal stability in the medium term, we warn, this will increase democratic ungovernability, public distrust and restrict the scope for sustainable, sustained and inclusive economic growth.

Central America: Fiscal Outlook - April 2016

April 2016

From 2014 to 2015 the size of central governments remained constant at an average 18.5% of gross domestic product (GDP).

From the introduction of the report: "Macrofiscal Profiles: 6th Edition" by the Central American Institute for Fiscal Studies (Icefi):

2015 proved to be a period of low tax advance for the Central American region.

Fiscal Outlook in Central America

April 2015

"Fiscal accounts for 2015 anticipate an additional burden of concerns about the sustainability of the public finances of the governments of the region."

From a report entitled "Macrofiscal Profiles: 3rd Edition" by the Central American Institute for Fiscal Studies (Icefi):

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