Guatemala: Uncertainty in Construction Sector

Fiscal reforms and the lack of resources for public investment have generated great uncertainty in the sector, coming at the same time as a shrinking of construction projects for housing and public infrastructure.

Friday, June 7, 2013

This was despite the Bank of Guatemala (Banguat) having forecasted growth of 7.7%. The tax reform package passed last year by Congress includes measures affecting property development. "There is little certainty of how payments must be made," said Llerena Pelayo, president of the National Association of Home Builders (Anacovi).

The businessman said a consensus was reached with the Ministry of Public Finance (Minfin), the Superintendency of Tax Administration (SAT) and the Special Verification (IVE) unit of the Superintendency of Banks to make changes to four items of the new tax laws.

"Clear rules are needed to promote housing in the country," recommended Llerena when asking Congress to approve quickly the changes agreed with the authorities and which were supposed to be approved in May, but have now been postponed until August.



More on this topic

Guatemala: Bleak Outlook for Construction

August 2016

A bureaucracy that keeps delaying delivery of construction licenses, is now joined by a possible cement tax proposed by the government.

Entrepreneurs in the sector anticipate a relatively poor performance for the sector in the remainder of the year, although no significant increases are expected in the prices of materials in general. The possibility that the proposal to levy $0.65 per sack of cement actually materializes comes on top of problems faced in obtaining building permits, which has forced some projects to grind to a halt.

Guatemala: More Real Estate Development in the Capital

September 2014

The increasing preference for residences in central areas of the capital is generating business opportunities for developers in areas which have not yet been exploited.

Real Estate companies say that although there is a good distribution of the supply of high rise and traditional houses in the capital, "... development is needed of zones 3, 6, 7, 8, 9 and 12, which have access and services."

Call for Changes to Tax Reform Act

October 2013

The National Association of Home Builders in Guatemala believes that two articles of the Tax Reform Act, create uncertainty over how the sector is to be taxed.

This was explained by Llarena Pelayo, president of the National Association of Home Builders (Anacovi). The construction sector considers that Articles 34 and 35 of the Tax Reform Act affect the development of the sector.

Guatemala: Construction Falls 4.7% in First Quarter

August 2012

Some of the causes mentioned are the low implementation of works by the State and municipalities, reluctance to invest remittances and fiscal reforms that discourage investment.

An article in Prensalibre.com reports that Oscar Sequeira, president of the Statistical Commission of the Guatemalan Chamber of Construction (CGC), said "The new administration generated positive expectations which led to dynamism in the sector, but as time passed by it has gone down, especially after the tax reform."

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