El Salvador: Changes Promised in Tax Reform Bill

The government has agreed to modify the terms of the tax reform proposal to take into account criticisms made by the private sector.

Thursday, May 29, 2014

Salvadoran private companies have outlined to officials the adverse effects that the country would face if the proposed new tax measures were applied, receiving signals of openness to a discussion from the Government, who for the first time since 2009 and 2010 has agreed to negotiate tax reforms with entrepreneurs.

"... After the third meeting held yesterday between the Government and the senior leadership of the National Association of Private Enterprise (ANEP), the president of the business association, Jorge Daboub, said the government promised to take their considerations to the Legislature and schedule another meeting within two days to discuss the issue at a technical level. The government's openness was noted and Daboub hoped that there would be no "surprises" in the coming days.

"Private enterprise ... also presented a number of alternatives which need to be worked on right away, such as economic growth and a fiscal responsibility law. According to Daboub, none of these reforms should be passed in the Legislature since many of them would end up affecting the whole population and some of them even clash with the Constitution of the Republic, he said without elaborating further. "

More on this topic

El Salvador: Tax Free Cities

June 2014

The private sector has proposed creating development zones with specific tax laws and tax free status in order to encourage local and foreign investment.

Following a concept created by economist Paul Romer and implemented in cities such as Hong Kong, and proposed in Honduras through the passage of a law last year, Salvadoran businessmen are proposing 29 law reforms in order to create development zones which have their own laws to enhance the competitiveness of companies located within them.

Salvadoran businessmen 'Lament' Approval of Tax Reform

December 2011

ANEP, the Association of the Private Enterprise, stated its regret with the recently approved tax hike.

ANEP press release:

Regarding the tax increase approved by the FMLN, GANA, PCN and PDC, the National Association of Private Enterprise, ANEP, declares:

1. We lament that the representatives who voted for more taxes care more about what the government offers them in exchange for their votes, than the consequences of causing unemployment and deepening poverty in El Salvador.

El Salvador Negotiates Fiscal Pact

June 2010

The business sector will present proposals to solve the fiscal deficit, which may also be the foundation of a social pact.

17 proposals will be presented, aimed at two large areas: reducing spending and increasing revenue.

Jorge Daboub, president of the Salvadoran Chamber of Commerce and Industry, explained: “We understand that the country has a serious fiscal problem, the deficit has worsened due to the country’s negative economic situation. As the private sector, we have produced a document that will give the government tools to correctly address the problem, in a comprehensive and effective way”, reported La Prensa Grafica.

Salvadoran Businesses Object Fiscal Reform

October 2009

ANEP, the Private Enterprise Association warned the proposed tax reform would impact negatively on consumers.

Federico Colorado, ANEP President, said: "In our opinion, in times of crisis we must study how to make the economy more dynamic, make it grow and analyze how to boost the diverse productive sectors".