Guatemala: Court Ruling Against Tobacco Tax

The Constitutional Court ruled in favor of an appeal by British American Tobacco, alleging double taxation.

Monday, October 18, 2010

The decision, by the highest court in Guatemala, repeals the second paragraph of Article 27 of the Tobacco Law which sets the basis for calculating the tax at no less than 46% of retail price.

The constitutional claim brought by the tobacco company noted that tax calculated on that basis, had "double taxation", since tobacco also pays value added tax.

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Guatemala: British American Tobacco Willing to Dialogue

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After a decision by the Constitutional Court, the tobacco company announced its willingness to dialogue.

The decision of the Constitutional Court in favor of an appeal by British American Tobacco, which alleged double taxation, will negatively impact tax revenues.

Sofia Oliva, manager of corporate affairs of the company, told Prensa Libre, "After being notified of the decision, we initiated contact with the government authorities to find long term solutions."