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%.
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%.
Businessmen in Nicaragua estimate that this year the sales of houses will not exceed one thousand units throughout the country, which is explained by the economic situation that the country has been living for fourteen months now.
Although in April 2018 the political and social crisis broke out in the country, builders managed to sell 3,108 homes last year, but the figure was 34% lower than the 4,738 homes sold in 2017.
In Nicaragua, the business sector is preparing an appeal of unconstitutionality against the Tax Concertation Law, approved a few days ago by the National Assembly.
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.
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.
A 40% decline is estimated in the construction of social housing investments in the country, and in the case of middle and upper-class housing, the contraction reaches 70%.
According to figures from the Superior Council of Private Enterprise (Cosep), the value added in the construction sector will register a 25% decline, falling from $399 million in 2017 to $300 million in 2018.
After the political and social crisis that began in April, the Nicaraguan economy will lose more than $1.3 billion this year, and GDP could decline by 4%, together with the collateral effects suffered by the countries of the region.
Several indicators have reflected the weak performance of the country's economy since the crisis began. One of them is the IMAE, as the Central Bank of Nicaragua reported that following the trend that has been observed since May, in September the index reported a 4.3% decrease compared to the same month in 2017.
Businessmen in Nicaragua reported that from January to September sales of furniture and wood showed a decrease of 60% compared to the same period in 2017.
According to the second Monitoring of Economic Activities in Nicaragua, of the Superior Council of Private Enterprise (Cosep) and the Nicaraguan Foundation for Economic and Social Development (Funides), under the political and social crisis that has affected the country for more than six months, sales of the furniture sector have reported negative results.
In September, sales of houses in Nicaragua reported a fall of 80%, and sales of vehicles and hotels were reduced 75% and 70%, respectively, compared to the same month last year.
According to the Second Monitoring of Economic Activities in Nicaragua, prepared by the Superior Council of Private Enterprise (Cosep) and the Nicaraguan Foundation for Economic and Social Development (Funides), during September sales of advertising agencies fell 48%, those of distributors of medical equipment 40% and those of restaurants 35%, compared to the ninth month of 2017.
Preserving macroeconomic and financial stability and restoring private sector confidence are part of the IMF's recommendations to the Nicaraguan government to mitigate the impact of the political and economic crisis.
A team from the International Monetary Fund (IMF) visited Nicaragua, and after evaluating the situation of the economy after more than six months of social and political crisis, forecasts a 4% contraction of the Gross Domestic Product by 2018.
Arguing that the law of creation of the Nicaraguan Company of Imports and Exports attempts against free market, the business sector demands to abolish the proposal.
The Superior Council of Private Enterprise (Cosep) strongly opposes the approval of the Law that aims to create the Nicaraguan Company of Imports and Exports (Enimex), which would allow the State to conduct commercial transactions.
The union of Nicaraguan businessmen has stated that starting from September, Copa Airlines will stop operating frequencies to Managua from San Jose, Costa Rica and Panama City.
According to the Superior Council of Private Enterprise in Nicaragua (Cosep), "...The affected flights are Managua - Panama, San José-Managua, Managua-San José and Panama-Managua, while the only route that the airline is keeping active is Managua-Guatemala, however, only Monday, Wednesday and Friday."
In response to the rupture of the dialogue on the part of the Ortega administration, companies and citizen organizations have called for a national strike on Thursday, June 14.
Demanding the cessation of repression by the Government and the resumption of the National Dialogue, social and business organizations, called for a general strike to take place tomorrow.
In search of a solution to the crisis that has Nicaragua on tenterhooks, the business sector has asked Ortega to bring forward presidential elections in an orderly manner and with a renewed Electoral Council.
In a letter signed by the main Nicaraguan business leaders, the private sector demands that President Ortega stop the violence against the demonstrators and call presidential elections early, as a last step to begin to solve the crisis in which the country has been immersed since mid-April.
In Nicaragua, President Ortega has revoked the controversial law to reform the National Institute of Social Security, but demonstrations continue and business leaders are calling on the government to have a dialogue.
Five days of protests, looting and several deaths in different areas of the country is the result of the controversial reform that the Ortega administration announced on Wednesday, and which only five days later, it had to revoke in order to try to ease social tension.The reform aimed to raise the contribution paid by companies by 2% and employees' contribution by 5%, effective from July.The presidential decree 04-2018 was published this Monday in the Gazette number 76.