Guatemala: State Spending and Taxes Questioned

The Foundation for Development in Guatemala argues that there is a lack of technical justifications for new taxes and lack of transparency in approving the 2015 budget.

Wednesday, December 10, 2014

From a statement issued by the Foundation for the Development of Guatemala (FUNDESA):

The Foundation for the Development of Guatemala - FUNDESA - expressed concern about the non-transparent way in which the General Budget of the Nation for 2015 was approved, and the lack of technical studies to support various tax increases, including both the one applied to telephony and the distribution of cement, as well as the excessive increase in royalties.

The adoption of a budget which does not promotes clear rules in several areas, the decline in transparency for public works within the country through the use of NGOs and the approval of taxes without an analysis and technical discussion, limits the country's competitiveness, discourages investment attraction and undermines legal certainty, creating a business environment that is not conducive to the creation of new jobs.



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In the last three years extortion offenses have increased by 20%, affecting competitiveness and reducing the country's ability to attract foreign investment.

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Guatemala: Industrialists Reject New Taxes

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The argument is that the tax on cement will increase the cost of housing by at least 6% and the tax on phones will directly affect users of prepaid telephone lines.

From a statement issued by the Chamber of Industry of Guatemala:

The Chamber of Industry of Guatemala emphasizes that even though it promptly denounced the risk of lack of transparency and accountability of the state budget for Fiscal Year 2015, it has been approved and will lead to negative impacts on the population.

El Salvador 2015: More Borrowing or Higher Taxes

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The productive sectors have indicated that the state budget approved for 2015 is underfinanced and will force the government to raise taxes or issue more debt in order to comply with it.

The approved general budget for the nation is $4.824 billion an amount which according to the private sector can not be covered by current tax revenues, therefore in order to raise this amount there must be either be cuts made to services such as subsidies or social programs, increases or creation of more taxes, or more debt taken on.

Guatemala's Financial Present and Future

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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.

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