Taxes and International Prices Damage Agriculture

The recent fiscal reform, changes in social charges in Nicaragua and low international prices are affecting the competitiveness of the sector.

Friday, March 22, 2019

At the end of February 2019, in the midst of the country's political and economic crisis, the National Assembly approved a tax reform that increases the income tax of large taxpayers from 1% to 3%.

See "More Taxes in Times of Crisis"

In addition, reforms to the Nicaraguan Social Security Institute (INSS) were implemented, consisting of a 19% to 21.5% increase in the employer's quota for companies with fewer than 50 workers, and in the case of companies with more than 50 workers, the proposal is to increase it from 19% to 22.5%.

Mabel Arévalo, executive director of Agroesnica, said that "... the direct impact of the implementation of fiscal reforms plus the increase in the INSS means an annual increase in production costs between $700,000 and $800,000 approximately, a cost that we cannot pass on to our selling prices because we do not put the prices of international markets."

Also see "How to Oppress an Economy"

Michael Healy, president of the Union of Agricultural Producers of Nicaragua (Upanic), told Elnuevodiario.com that "... to the existing economic deterioration 'we must add all the economic measures that the government has taken. While unemployment increases and the loss of purchasing power of Nicaraguans, the agro-export sector will not be able to influence prices in international markets and will not be able to transfer costs to their products."

Interested in detailed data on Central America's agriculture industry?

Contact us:









this site is protected by reCAPTCHA and Google's privacy policy and terms of service.
Need assistance? Contact us
(506) 4001-6423


More on this topic

Tax and Minimum Wage Tension

July 2019

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.

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.

More Taxes in Times of Crisis

February 2019

In the midst of Nicaragua's political and economic crisis, the National Assembly approved a tax reform that increases the income tax of large taxpayers from 1% to 3%.

On the morning of February 27th, the reform of the Tax Concentration Law was approved, which also contemplates raising from 1% to 2% the income tax for medium sized companies with higher incomes.

How to Oppress an Economy

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.

Although the country has been in a serious economic and political crisis since April 2018, when the government tried to implement reforms to the Nicaraguan Institute of Social Security (INSS), the Ortega administration is once again trying to make changes to the institution, this time through an administrative resolution.

Nicaragua: Exemptions and Tax Exonerations

August 2012

The projected tax reform is a battlefield for the competing interests of the various productive sectors.

Both the Superior Council of Private Enterprise (COSEP) and the Union of Agricultural Producers of Nicaragua (UPANIC), are in favor of excluding the agricultural sector from the discussion of tax reform, meanwhile the National Workers Front (FNT) and the Nicaraguan Council of Small and Medium Enterprises (Conimipyme), reject such a position as discriminatory.

 close (x)

Receive more news about Agriculture & Food

Suscribe FOR FREE to CentralAmericaDATA EXPRESS.
The most important news of Central America, every day.

Type in your e-mail address:

* Al suscribirse, estará aceptando los terminos y condiciones


Stock Indexes

(Apr 6)
Dow Jones
-5.60%
S&P 500
-5.10%
Nasdaq
-5.64%

Commodities

(Jan 21)
Brent Crude Oil
87.070
Coffee "C"
237.55
Gold
1,836
Silver
24.26