New Tax Reform in El Salvador

The government admitted working on a new tax reform to broaden the income tax and create new taxes.

Wednesday, February 9, 2011

With regards to new property tax, Finance Minister Carlos Caceres said it would be applied for the 2012 and 2013 fiscal year.

"On tax reform as a whole, the finance minister said they are still working on it, but there isn't anything formal, in any case he indicated that it could jump-start in the first half of this year," noted

More on this topic

El Salvador: Tax on Unused Properties Proposed

May 2014

A bill aims to tax properties of any value that either do or do not have constructions on them, and which do not have a specific use anywhere in the country, declaring them "luxury goods".

The proposed law states that "... property for recreation, leisure or rest, with or without construction or under construction, regardless of its value or location , such as houses, lots, plots, villas located in beaches, lakes, mountains or the city ... "will be taxed at 1% on the assessed value established for the property.

El Salvador Businesses Oppose New Taxes

May 2014

The private sector is opposed to the conditions in the third reform package the outgoing government intends to implement, claiming that state expenditures should be reduced first.

More control of public spending and no new taxes are the demands from employers to the government, which aims to increase government revenues with a third reform and the issuance of $800 million in bonds.

More Taxes in El Salvador

July 2013

The third tax bill is now ready; it will tax bank transfers, luxury homes, as well as products used by printing companies.

The Ministry of Finance has not yet said when it will send the plan, which expects to increase revenuea by about $100 million, to the Legislature. According to the chief of Finance, Carlos Caceres, "we are working on the project which will, by 2020, return us to the same pre-crisis debt levels (before 2008).

El Salvador: Tax Burden to 17% by 2014

March 2011

The government's goal is to have a tax burden of 17% by 2014 through economic growth and increased taxes.

Currently, the country's tax burden (percentage of revenue compared with the Gross Domestic Product (GDP)) is 14.1%.

Finance Minister, Carlos Caceres, acknowledged the goal may seem ambitious but it is also necessary or otherwise the country has no fiscal viability.

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