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.

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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 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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