Tax reform: Less Jobs

Businessmen in the industrial sector in Nicaragua say that since the tax reform was implemented in the first quarter of the year, employment has fallen between 30% and 35%.

Thursday, July 4, 2019

On February 27, 2019 was approved the amendment to the Law of Tax Concertation, which consists of raising from 1% to 2% income tax for medium enterprises with higher income. Another of the measures contemplated by the reform is to raise the income tax of large taxpayers from 1% to 3%.

See "More Taxes in Times of Crisis

Sergio Maltez, president of the Chamber of Industries of Nicaragua (Cadin), explained to Elnuevodiario.com.ni that "... the reform itself as approved is not 'sustainable in time. In the case of the industrial sector we have had reports that there has been a reduction in employment between 30% and 35% as a result of this reform. There is an affectation in the part of the food security, because of the elimination of the exemption of the VAT to certain agricultural services and that increases the costs'."

Guillermo Jacoby, president of the Association of Producers and Exporters of Nicaragua (Apen), said that "... The reform increased production costs, and has a high cost for the country, a high cost for the population, employment and a very high cost for the future."

In spite of the fact that the country is currently evaluating the reform of the Tax Concertation Law, José Aguerrí, president of the Superior Council of Private Enterprise, said that the business sector is not invited to participate.

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More on this topic

Pessimism Over Tax Reform Review

July 2019

In the government's review of Nicaragua's tax reform that has been in place since February, businessmen consider that no tax cuts will be made, even though production costs in the country have risen considerably.

After the approval on February 27, 2019 of the amendment to the Tax Concertation Law, which consists of raising from 1% to 2% the income tax for medium sized companies with higher income, and for large taxpayers from 1% to 3%, the productive sector has reported increases in its production costs.

Nicaragua: Tax Increase for Non-resident Investors

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With the reform to the law on Tax Concentration non-resident investors in the country will have to pay 15% instead of 10% on income earned from capital.

According to Juan Sebastian Chamorro, executive director of the Nicaraguan Foundation for Economic and Social Development, the new reform "...

Private Sector Against New Tax Charges

February 2014

The union of private enterprises in Nicaragua is opposing the amendment to the Law on Tax Coalition.

The Superior Council of Private Enterprise showed its opposition to the reform of the Law on Tax Coalition. The head of the union, José Adán Aguerri said "we will file a constitutional appeal against decree 06-2014, and amendments and additions to this Law, published last week."

Reforms to Tax Law in Nicaragua

January 2014

Topics related to tax increases and the fiscal industry are to be addressed in the revision of the law.

In mid-2014, the process will start for a new amendment to the Law on Tax Coalition. Everything related to aspects of tax industry will be reviewed, the issue of bonuses and more technical issues "that are part of the process that must be continuously developed," said José Adán Aguerri, president of the Superior Council of Private Enterprise (Cosep).

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