Employers admit their need to improve transparency and fight corruption, but have requested extensive analysis and discussion of the proposal sent to Congress.
Tuesday, April 10, 2012
Hernán Guerra writes in the Journal by the Guatemalan Chamber of Industry:
The President, Otto Perez Molina, wants Congress to approve in record time another set of laws which, according to him and his staff, will become new weapons to be used to combat corruption, improve transparency of public expenditure and at the same time, leverage the recently approved tax reform. However, the objectives are not shared by analysts, representatives of civil society and business, with the common denominator being that the proposals require "more analysis, more discussion and participation."
And, as eight reforms and the three initiatives have been put forward, questions are emerging. Do public officials have knowledge of as many areas as there are included in the bills? Are these proposals legally and technically well-founded enough to restore confidence to taxpayers and Guatemalans in general? Is it right or prudent to limit the discussion to Congress or should it be expanded to include a circle of professionals and other sections of civil society?
Up to March 21st, the Finance Minister, Pavel Centeno, had argued that "these laws will allow us to improve the quality of spending, transparency, preventing resources being invested in enriching people who have an official function." He also argued that "including the whole tax package (with approved tax updates and transparency initiatives) we calculate that Q10 billion could be generated for the state."
The mere announcement of reforms to the Constitution of Guatemala stops investment because of the removal of confidence and legal security for companies that might come to the country.
During a forum held by the Managers Association of Guatemala (AGG), concern was expressed over the constitutional reform process initiated by President Otto Perez Molina, and the excessive speed in the adoption of new standards such as the Customs and Tax Reform Act, whose implementation has created difficulties for companies.
Representatives from business associations are calling for discussion on drafting a project than it differs from the current one, which was approved in the Finance Committee of Congress.
The president of the Chamber of Commerce of Guatemala (GCC), Jorge Briz said that "we disagree with the suggested tax reform."
The four candidates leading the polls, Otto Pérez Molina, Sandra Torres, Eduardo Suger and Harold Caballeros, have presented their fiscal policy.
Otto Pérez Molina of the Patriota Party, is urging the adoption of a fiscal pact, and said of tax increases, "During my administration we will have to consider whether an increase (in tax) is necessary or not."
There is urgent need to strengthen the Superintendence of Tax Administration (SAT) with audit and control instruments.
Tax evasion reached $ 2,500 million, and businessmen insist that before a tax reform is passed, increasing tax burden and affecting competitiveness in the country, it is required "to improve the fight against tax evasion and customs smuggling."
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