The authorities that will assume the government in 2020 in Guatemala could evaluate options to tax temporarily some sectors, however, there would be a risk that these taxes become permanent.
The Superintendent of Tax Administration has contradicted the announcement made by the finance minister and ruled out a possible tax amnesty in the short term.
The highest tax authorities in Guatemala are contradicting each other. Although the minister of Finance, Julio Héctor Estrada, announced a possible tax amnesty for the second half of this year, Juan Francisco Solórzano Foppa, head of the Tax Authority (SAT) said in remarks published by Elperiodico.com.gt that "there will not be a tax amnesty".
The business sector is opposed the bill with which aims to increase the tax applicable to dividends, earnings and profits from 5% to 6%.
There's a proposal in Congress to increase the income tax (ISR) paid on dividends, profits and earnings by 1%. The intention is to allocate those funds to the creation of a Ministry for Youth.
"... The tax changes should be subject to prior consultation with the Ministry of Finance and analysis carried out to determine the impact on the business sector. When it was raised to 5% there was an explanation. It does not seem fair to us that reforms be made casuistically without consultation and with a specific assignment made," said Julio Héctor Estrada, Minister of Finance to Elperiodico.com.gt regarding the tax change which would mean revenues to the treasury of up to $10 million, according the legislators who proposed it.
The Superintendency of Tax Administration has authorized the publication of audit procedures in cases of VAT refunds to exporters.
In response to complaints from several exporters, the Ministry of Finance has removed the information restriction on enforcement procedures as approved in the Access to Information Act. This follows complaints from the private sector over the fact that the rules defining the auditing procedures carried out by the SAT are not precisely known.
In an attempt to increase tax revenues, the executive announced that it is now considering taxing the distribution of soft drinks such as juices, isotonics and sodas.
It is expected that in the first week of February analysis will be presented of modifications to the tax on the distribution of beverages and on tobacco and tobacco products, with the aim of obtaining more resources to finance the national budget for this year.
Increased borrowing costs, a disincentive to foreign investment and distrust of economic performance, are part of the expected scenario if public debt growth is not controlled.
Prensalibre.com reports that "... The draft budget for 2015 presented by the Ministry of Finance, amounting to $9.250 million (Q71 thousand 840.8 million), contemplates taking on new debt of about $2 billion (Q15 billion), of which $1.6 billion (Q12 thousand 334 million) came from bonds and loans. "
Discussion is being given to hiring an external company to provide consulting services in order to improve the management and collection of taxes.
The proposal which emerged from the leadership of former Finance Minister Pavel Centeno, is once again gaining strength at a time when the Tax Authority is analysing different alternatives to raising tax revenue.
A new commission set up by the Ministry of Health will regulate advertising of tobacco and alcohol and will look at increasing taxes.
The National Commission for the Prevention of Chronic Noncommunicable Diseases and Cancer, established by the Ministry of Health and Welfare will be responsible for the regulation of advertising of snuff and alcohol and also promote the consumption of healthy foods.
Between January and August 2013 $1.135 billion was raised in VAT on imports, while in the same period in 2012 the amount was $1.137 billion.
Data from the Tax Authority (SAT) shows that in terms of customs duties $157 million was collected, down by 22% compared to the $202.2 million reported in 2012.
"There has been no improvement and collections continue to decline.
The exemption of fines for customs offenses will be extended, for the sixth time, until December 15.
The exemption which was to expire on 15 September will be extended until 15 December.
"We are extending the agreement because there is a new Intendent of Customs and we do not want to generate distortion in operations. We believe this will be the last extension to be given," said Pavel Centeno, Minister of Finance, yesterday.
Being called into question is the establishment of a reduction of income tax payments when calculating as a deductible expense extra benefits given by companies to their employees .
The accusations were made by some MPs who met with the acting head of the Superintendency of Tax Administration (SAT), Omar Franco and Deputy Minister of Finance Durval Carias.
The amnesty includes those who owe taxes for tax periods prior to 1 January 2012.
S21.com.gt reports that "this measure is complementary to the cancellation of 10% in tax payments and 50% reduction in the circulation tax".
"It was clear they had to agree to the waiver. Almost always a law produces the need for a government decision. It is estimated that $77 million is owed in taxes, of which, 65% relates to income tax.
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.
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.