Tax Incentives for Agriculture

In order for Guatemalan producers to compete under the same conditions as neighboring countries, the government is preparing a bill that seeks to exempt agricultural inputs from VAT.

Friday, January 31, 2020

The initiative, known as the "Fiscal Equity Law", is being prepared by the Ministry of Agriculture, Livestock and Food (Maga), because, according to the institution's top official, other Central American countries do not charge value-added tax (VAT) on agricultural inputs.

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"... The aim is, for example, to bring Guatemala into line with Honduran law 119-2016, which establishes this exemption for the neighboring country," said Oscar Bonilla, the agriculture minister.

Bonilla explained to that "... This would include machinery, tractors, pumps, pesticides, agricultural implements and other inputs. For this purpose, the initiative is expected to be transferred to Congress in the coming weeks, and will be coordinated with the General Secretariat of the Presidency for the respective procedure."

For directors of the Chamber of Agriculture, if this proposal is approved, Guatemalan production will be more competitive and investment in the agricultural sector could be boosted.

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