The Ministry of Finance in Guatemala has accepted demands made by the Union of Used Vehicle Importers and announced changes to the draft Tax Update.
The government has backtracked on its plans for fiscal reform in light of strong reactions from used-vehicle importers. They suggested using the same system for calculating the tax on entry of used cars into the country, and permitting entry of used cars up to 15 years old, rather than the 7 years proposed by the Ministry of Finance.
Four tenders for the procurement of medicines have been canceled in Guatemala, on the grounds that they were approved by the outgoing government a few days before the change of command.
The Ministry of Finance reported on the cancellation of 4 tenders for the supply of medicines via open contract.
The official argument holds that the tender was published on November 23rd , 2011 and the submission of tenders took place on 12th and 13th of January 2012, a very short time before the change of command, which took place on 14th January.
In Guatemala, in order to meet WTO requirements, exemptions will be eliminated gradually, and instead economic benefits will be awarded.
The exemptions are to be applied to sectors such as maquila industry, through Law 29-89, and the Free Zones Act.
"In order to meet a requirement of the WTO, the exemptions will be eliminated gradually, but economic benefits will be granted in order to keep the country attractive for investments", said Pavel Centeno, Minister of Finance.
Cacif, leader of the Guatemalan private sector, said that "we must all do our part" and promised a consensus with the government.
The presidents of business chambers of Guatemala met on Wednesday with President Otto Perez and Finance Minister Pavel Centeno, to hear a proposal for tax reform law, and adopted a positive approach to the coming changes.
The bill provides that no amounts may be deducted from VAT on purchases, and increases the tax base for the payment of income tax.
The Guatemalan government’s tax reform law is ready, and contains several new points: employees ability to deduct VAT from annual purchases from their taxes has been eliminated, the tax base has been increased, and the road tax for vehicles has been doubled.
Among other measures, the bill proposed by the government examines establishing regimes for income tax and eliminating accreditation for VAT returns, a method that has encouraged evasion.
The new Guatemalan government has refined its proposed fiscal law reform, which includes proposals such as removing the accreditation of the VAT tax and setting different levels for the deduction of income tax.
Urgent measures taken by the new government who declared the health system in a "state of calamity" , have sparked controversy in Guatemala, although conflicting accounts are emerging.
A few days after Otto Perez Molina assumed the executive office, the Ministry of Health of Guatemala said it would buy a lot of medicines worth Q70 million ($ 9 million), without a tender, in order to meet the urgent need for drugs and supplies in the public health system, although the Ministry of Finance has denied that such a mechanism would be adopted.