Guatemala: Criticism of Tax Reform

Absence of initiatives to cut spending and lack of dialogue with the business sector are the main criticisms of the tax reform bill proposed by the Executive Power.

Friday, August 12, 2016

In addition to the expected impact on the productive activities that will be affected, such as mining, one of the criticisms of the project is the absence of issues related to transparency in the use of resources, a key issue after the corruption cases revealed in 2015.

See "Guatemala: What Will Be Taxed and By How Much"

Pedro Prado, from the Association for Research and Social Studies (ASIES) told that "... 'the opportunity has been missed to present a more complete more comprehensive proposal, because [this] only focuses on the tax side, but is lacking on transparency and quality of spending. It is a piecemeal approach, they should have called together the authors of the Fiscal Pact because the subject is extremely important.'"

Alfredo Galvez Sinibaldi, from the Union of Extractive Industries, "... states that the industry is contracted and the mining sector affected by government decisions that do not encourage investment, with "fiscal packages" and actions against the exploitation of minerals."

More on this topic

Tax Reform Bill Withdrawn in Guatemala

August 2016

Without setting a date for a new proposal, the Executive has asked Congress to return the controversial bill.

After receiving criticism because of the absence of reforms in the control and transparency of public expenditure, the Executive has requested the withdrawal from discussion in Congress of the tax reform bill, which aimed, among other things, to raise tax on the distribution of cement, mining and fuels.

A New Fiscal Agenda for Guatemala

January 2016

In the opinion of the Central American Institute of Fiscal Studies, the only way to consolidate public finances in a sustainable way is to reduce tax breaks and increase tax collections.

From a statement issued by the Central Institute for Fiscal Studies (Icefi):

The Central American Institute for Fiscal Studies (Icefi) has proposed as a fiscal agenda for development: meeting the public demand for integrity and transparency; effective, efficient and effectual public spending as a tool for inclusive and democratic development; and financial viability with taxation being part of democratic accountability.

Guatemala's Financial Present and Future

July 2014

A review of the fiscal outlook in Guatemala, the difficulties encountered and possible solutions for addressing these challenges.

From the Introduction of the study by the Foundation for the Development of Guatemala (FUNDESA):

In any country, taxation is critical to ensuring the proper functioning of the state.

Tax Reform to Reduce Public Spending

January 2013

In Costa Rica a new tax reform package includes an attempt to reduce state expenditures by 1% of GDP.

The Finance Minister Edgar Ayales, outlined to to the details of a new attempt to correct the deficiencies of the Costa Rican tax system, while curing the problems in public finances.

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