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)." 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. "

More on this topic

Taxes on Textiles and Footwear Companies in Nicaragua

November 2014

The amendment to the Law on Tax Coalition sent by the Executive to the Assembly repeals the exemption from VAT on domestic production of clothing and footwear.

If the reform is approved, SMEs in these sectors will be the most affected "... as it states that they must pay Value Added Tax (VAT) and also orders that they withhold income tax, through an unclear mechanism within the fixed quota system. "

Costa Rica: Global Income and VAT in Proposed Tax Plan

June 2014

Replacing Sales Tax with VAT, applying a system of global income and maintaining exemptions in free zones are part of the projects being prepared by the government.

With the three projects he plans to introduce in the Legislature, the Executive leader intends to increase total tax revenue to 2% of GDP in two years and completely eliminate the primary deficit, which at the end of 2013 was 2.8% of GDP.

Costa Rica: Anti Tax Evasion Bill

June 2014

The new Solís administration plans to establish the Value Added Tax and demand proof of tax payment for procedures in public institutions and on application for bank loans.

The tax reform being prepared includes a bill to reform income tax. This is part of a project by the Ministry of Finance which includes 55 specific actions among which are changes in the area of ​​income, reducing government spending and control of state borrowing.

New Fiscal Rules Effective in Nicaragua

January 2013

On January first new rules came into force on taxation which reduce income tax, and others that aim to reduce tax evasion.

The government hopes that with this new reform it will increase productivity and competitiveness.

"The law brings new issues, such as a fiscal method for separating of incomes: into earned income, income from economic activity and income from equity.

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