The measure to collect value added tax on tips is being maintained despite the resistance shown by the corporate sector.
"We have reached an agreement with employers and the three articles in which they disagreed have been excluded from the proposed amendments to the Tax Update," said Pavel Centeno, Finance Minister (Minfin).
According to Andres Castillo, president of the Chamber of Industry of Guatemala (CIG), they only signed up to the Value Added Tax (VAT) on tips in order not to hinder the discussion of other items on which agreements have already been made.
Both sides are discussing three articles of the Tax Update Law, but so far have failed to reach an agreement.
According to Andres Castillo, president of the Chamber of Industry of Guatemala (CIG), one of the items that is causing disagreement is related to the payment of income tax (ISR) on the tips received by service companies.
The second article concerns a payment that is made up of a 10% income tax on the interest on loans taken out abroad.
A court ruling has suspended the Tax Authority in Guatemala from closing businesses who fail to comply with tax rules.
Mauro Chacón, President of the Constitutional Court (CC), explained that four actions of unconstitutionality have been presented by the chambers of Agriculture and Commerce, one of which was provisionally suspended by the Supreme Court.
Guatemala's business associations are asking for explanations about the government's decision not to accept the changes already agreed on by a bipartisan technical committee.
"Andres Castillo, president of the Committee of Commercial, Industrial and Financial Associations (Cacif), explained that the technical committee formed by the Ministry of Finance, the Tax Authority, the Vice President and the private sector" reached agreement on 28 items which were drafted with the preamble, "which were rejected by Perez Centeno", reported Siglo21.com.gt.
The Chamber of Industry of Guatemala has submitted to the Constitutional Court an appeal against 14 items in the Laws of Taxation and Anti Evasion II.
"We see abuse in the functions that the SAT is acquiring in this new law," said Andres Castillo, president of the Chamber of Industry of Guatemala (CIG).
The actions are in addition to those raised weeks ago by MPs, businessmen and the chambers of Commerce and Agriculture, noted an article in Siglo21.com.gt.
The Coordinating Committee of Agricultural, Commercial, Industrial and Financial Associations is protesting against 40 items in the tax reform laws which came into effect on 1 January.
According to the members, this reform was approved by the Guatemalan Congress without much discussion and in a hasty manner.
According to an article published by Elperiodico.com.gt, CACIF intends to present to the Finance authorities a series of amendments that would modify decree 4-2012, the Act Strengthening the Tax Administration 2 (FAT2), and 10-2012, the Tax Law Update.
Guild members of the Chamber of Industries are in favor of requesting a revision to the current tax reform which came into effect on January first.
The chamber’s president, Andres Castillo said that "some union members" have identified several deficiencies in the tax reform approved by Decree 10-2012, Tax Law Update. "Most of all there is a lack of information and lack of criteria for how authorities will be enforcing this law."
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."
Briz believes that the reform proposed by the government "does not fit in with the reality in the country," and he added, "Guatemala needs fiscal reform and in depth restructuring, in the sense of simplifying taxes, tax rates have to be accessible , low and competitive worldwide", reports LaHora.com.gt.