Tax and Minimum Wage Tension

In Nicaragua, there is uncertainty because the government is reviewing the tax reform without the participation of businessmen, and because adjustments to the minimum wage could be made in September.

Friday, July 19, 2019

Weeks ago, it was reported that when the government's review of the tax reform in force in the country since February is completed, businessmen consider that no tax cuts will be made, despite the fact that production costs in the country have risen considerably.

At that time, Jose Adan Aguerri, president of the Superior Council of Private Enterprise, said that the private sector was not invited to participate in the review process of the tax reform.

The position of the business sector remains motionless, as Michael Healy, president of the Union of Agricultural Producers of Nicaragua (Upanic), explained to Laprensa.com.ni that "... the position that should be repealed the tax reform and reduce public spending, because otherwise the economy will continue to decline."

You may be interested in "Tax reform: Less Jobs

Another situation of concern for employers is a possible adjustment to the minimum wage, given that the current wage table expires in August.

Sergio Maltez, president of the Nicaraguan Chamber of Industries, said that "... it is necessary to analyze the situation well, whether or not to make an adjustment to the minimum wage. It is important to analyze properly, because if ultimately you are going to increase the salary to throw many people into unemployment, I think it is not appropriate, we in this time what we have done is to take care of the current job as far as possible."

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Retention of raw materials by the authorities of Customs and charges to businessmen by the mayors, are some of the problems that are affecting industrial companies in Nicaragua, in addition to the crisis and the rise in taxes.

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Beginning August 29, Nicaragua will begin to negotiate changes in the minimum wage, but the businessmen ask that the decision-making process consider the levels of inflation and fall in production.

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January 2019

In Nicaragua, the government plans to increase employer, labor, and state Social Security contributions, and to approve a tax reform that would increase taxes for medium and large companies.

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Nicaraguan Businessmen Reject Tax Reform

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The Superior Council of Private Enterprise, COSEP, considers that this is not the time to negotiate a tax reform.

José Adán Aguerri President of COSEP, reported that within the current economic context, fiscal reform would not be a response to alleviate the difficulties.

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