Guatemala: Government Expands Tax Reform

Despite several announcements of new taxes, the government will focus on controlling tax evasion and leave the decision to implement a tax reform to future administrations.

Tuesday, February 3, 2015

According to authorities at the Ministry of Finance, at the moment there is no consensus for fiscal reform. The priority now will be to pursue and strengthen tax administration in order to meet budget expenditures this year. Instead of implementing new taxes, they will seek to "... reduce default levels mainly in Income Tax (ISR) and Value Added Tax (VAT)."

Elperiodico.com.gt reports that "... The taxation scheme is still being analyzed in order to put forward a proposal that has long-term impact, and the first step will be to strengthen the work of the Tax Administration (SAT). " "... Reducing VAT and income tax evasion by 2% could raise up to $261 million and $130 million corresponding to a tax on telephony. "

Fernando Spross, an analyst at the Development Foundation of Guatemala, added "... In order to strengthen [the system] the SAT should start with the board of the organization and with the control mechanisms which are already in place. " "... The proposal made by the authorities includes strengthening the computer system, so that, among other things, it operates taxpayer current accounts and avoids crashing the customs system; the exchange of information. "

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