New Taxes Approved in El Salvador

As part of the tax reform promoted by the government a tax has been approved on financial transactions and changes have been made to income tax.

Friday, August 1, 2014

From a statement by the Legislative Assembly of El Salvador:

Companies with more than $150,000 in sales a year will pay a minimum tax rate with the new tax reforms.

During the plenary session on Wednesday approval was given, with 44 votes, to amendments to the Law on Income Tax, which aims to establish a minimum payment of one percent (1%) on net assets, for companies that have more than U.S. $150,000 in sales a year, and who declare taxes lower than that percentage.

The Head of the Parliamentary Group of the FMLN, Norma Guevara, said that the reforms have been widely analyzed and that within the Committee of Treasury and Budget, various different actors in society were listened to. "We must make an effort to make the tax structure more equitable and that those who earn more pay more. The retention of 1% would ensure that a portion of the tax payable by companies, is now available and that they can comply with what is applicable under the law. There is no reason to be shocked by that. It is an act of responsibility to the poor," she said.

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