Call to Veto Special Tax Regime for Agriculture

The Guatemalan Chamber of Commerce opposes the special tax scheme for agricultural activity approved by Congress, arguing that it is unconstitutional and violates the principles of tax equity.

Thursday, September 26, 2019

The new fiscal regime for agriculture, approved last September 24 by the deputies of the Congress of the Republic, has been surrounded by controversy, as from the beginning the chambers of industry and commerce expressed their opposition. See full bill.

Among the main fiscal benefits that agricultural producers will have that will be the object of this law, is that they will pay 5% of taxes on gross sales, as long as they do not exceed $39 thousand annually.

You may be interested in "Controversy Over Tax Regime for Agriculture

In response to this measure, the Chamber of Commerce stated in a statement its "... energetic rejection of the creation of a special regime of taxpayers with enormous fiscal privileges for those persons who develop production and commercialization activities in the agricultural sector."

Jorge Briz, president of the Chamber, explained to Prensalibre.com that "... One of the fundamental principles to be protected is equality before the law. The law is unconstitutional and favors with tax incentives to agroproducers, violates principles of tax equity, so we ask the President of the Republic to veto this legislation."

The article adds that "... the House that the approval of this decree 'weakens the revenue of the treasury, generating an uncontrollable fiscal hole, with technical estimates that can be several billion quetzals, since it eliminates VAT, and establishes reduced, arbitrary and discriminatory rates, which violate the constitutional principles of equality and tax equity. Consequently, this Law is absolutely unconstitutional."

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Tax Incentives for Agriculture

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In order for Guatemalan producers to compete under the same conditions as neighboring countries, the government is preparing a bill that seeks to exempt agricultural inputs from VAT.

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Although this bill was involved in controversy days ago, as the chambers of industry and commerce expressed their opposition, Congress decided to approve the bill. See full bill.

Controversy Over Tax Regime for Agriculture

September 2019

In Guatemala, the chambers of industry and commerce oppose the bill that proposes to create a special tax regime for agricultural activity.

The project "Law on Simplification, Updating and Tax Incorporation", which has been in Congress for more than two years, was scheduled for final discussion until September 10. See full bill.

Guatemala: Tax Incentives For Textile Companies and Call Centers Only

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Reforms have been made to a proposed Emerging Act for Conservation of Employment in order to maintain tax incentives only for textile sectors and call centers, leaving out other activities that were previously exempt.

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