No agreement on Fiscal Reform in Guatemala

The Opposition and representatives on the Finance Commission are reluctant to approve the initiatives which are supposed to increase collection of taxes.

Wednesday, October 1, 2008

Even though the Finance Commission is yet to issue a resolution, the main forces in Congress are said to be opposed to the increase in the Solidarity Tax rate to 1.25 and to the new registration tax for new vehicles. With so little support, the projects with which the Government hopes to increase its income are moving very slowly due to objections from the Opposition.

More on this topic

Guatemalan Tax Reform Still Waiting

August 2009

For a third consecutive time, Congress was unable to approve the tax reform.

The lack of agreement is centered around a proposed tax on a vehicle's first plate, and the implementation of a bluebook.

Implementation of a bluebook has been rejected by car dealerships, "because it would increase auto taxes up to 300%", reported

Guatemalan Tax Reform Could Leave Congress This Week

August 2009

The "oficialismo" political party will try to pass the tax reform law this week. In their own words, the reform is "absolutely consented".

Some of the changes included in the reform include a tax to the first circulation plate of vehicles, doubling the Vehicle Circulation Tax for 2011 and eliminating added value tax to the second and additional ownership changes for real estate.

Guatemala: New taxes create controversy

September 2008

The proposal to create the Solidarity Tax, another for vehicle registration and one that will increase the VAT paid on vehicles has encountered resistance in the private sector.

Minister of Finance, Juan Alberto Fuentes Knight, defended the fiscal modernization proposal and explained that if new taxes are not created and if the existing ones are not modified, they run the risk of leaving a "fiscal hole" for next year.

Guatemala: Fiscal reform sent to Congress

August 2008

The Executive Power sent the first part of the fiscal modernization project to the Congress of the Republic without the proposal for the new income tax (IRS) and VAT retencions.

The modernization project will be implemented over a period of two years, and includes reforms in public expenditure, the creation of citizen's observatory, a new set of regulations for the administration of trusts, and a Vice-Minister of Transparency at the Treasury.

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