Guatemalan companies have a greedy partner

Companies that operate in Guatemala have a partner who every year takes a third of their earnings, writes José Raúl González Merlo of Guatemala's National Center for Economic Research (CIEN).

Tuesday, May 20, 2008

The partner doesn't contribute a single cent to capital but has the right to study every last number in the companies' accounts. He contributes no new ideas but, when he feels like it, he can increase his take arbitrarily or impose fines and surcharges.
They call him the taxman and the 64,000-dollar question is: if he doesn't contribute anything, what use can he be?

More on this topic

Honduran Executive Abandons Tax Package

May 2012

The executive power has formally withdrawn the Law on Tax Breaks and Rationalization of Public Expenditure Control to Strengthen Public Finances, known as "paque-tito" in Spanish.

The initiative had been returned to the Ministry of Finance by the Legislative Budget Committee, which requested more details about which exemptions would be eliminated.

Álvaro Colom Insists on Discussing Tax Reform

January 2010

The president of Guatemala announced he will continue pressing the tax reform discussion with the private sector.

Guatemalan companies have restated they don’t want to discuss the possibility of increasing taxes, and according to them, Colom’s insistence may jeopardize the talks.

Guatemala: New taxes create controversy

September 2008

The proposal to create the Solidarity Tax, another for vehicle registration and one that will increase the VAT paid on vehicles has encountered resistance in the private sector.

Minister of Finance, Juan Alberto Fuentes Knight, defended the fiscal modernization proposal and explained that if new taxes are not created and if the existing ones are not modified, they run the risk of leaving a "fiscal hole" for next year.

Guatemala's government presents a fiscal reform initiative

June 2008

Guatemala's finance ministry began this week to send out information aboiut its proposed fiscal reform agenda.

Measures proposed include a total rewrite of the Income Tax Law and changes to the law governing the value-added tax (IVA). The goal is to raise the load on taxpayers from 12 percent of Gross Domestic Product (GDP) to 13.2 percent.

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