After the announcement of the intention to increase the tax on the distribution of cement and fuel in Guatemala, businessmen believe that in this scenario of incipient economic recovery it is not a good idea to increase the tax burden.
In order to face the effects of the economic crisis generated by the covid-19 outbreak, Guatemalan authorities are already beginning to discuss the fiscal policy to be applied in 2021.
In this scenario of economic crisis, falling tax revenues and the need to finance recovery programs, in Guatemala and Costa Rica it is already proposed to increase current taxes and create new ones.
Guatemalan authorities are already beginning to discuss the fiscal policy they will apply in 2021, when the economy will have to face the effects of the economic crisis generated by the covid-19 outbreak.
In order to access the $1.75 billion credit requested from the IMF, the Costa Rican government proposes to tax financial transactions, increase the tax on the profits of companies and individuals, and increase the tax on real estate.
On the afternoon of September 17, and in the context of a severe economic crisis that had been going on since before the beginning of the pandemic, the Alvarado administration presented the plan with which it intends to mitigate the fiscal impact of the Covid-19 crisis, a proposal to negotiate an agreement with the International Monetary Fund (IMF) to obtain a credit of $1.75 billion.
Although Costa Rica and Nicaragua approved fiscal reforms this year, it is predicted that the expected results in terms of tax collection will not be achieved.
The document "Centroamérica: análisis sintético, por país, del desempeño de la recaudación tributaria en 2019", prepared by the Instituto Centroamericano de Estudios Fiscales (Icefi), explains that, in the case of Costa Rica and Nicaragua, the expected results in terms of improved collection are still in doubt.
The tax reform law that would be approved in second debate in the coming weeks, involves the exoneration of arrears and penalties for taxpayers who pay their debts in the first three months after the publication of the law.
The proposed measure consists of exonerating 100% of the interest on arrears and up to 80% of the penalty to taxpayers who pay in the first month after the Law is published in the official newspaper La Gaceta.
The proposal to increase the tax on interest on financial investments in Costa Rica could eventually make credit more expensive for both the private sector and the government.
In the view of the National Securities Exchange (BNV) it is worrisome that initiatives such as an increase in tax on income from financial investments are being discussed without knowing in detail and clearly the impact that something like this could have on the stock market and the country's financial activities.
Despite several announcements of new taxes, the government will focus on controlling tax evasion and leave the decision to implement a tax reform to future administrations.
According to authorities at the Ministry of Finance, at the moment there is no consensus for fiscal reform. The priority now will be to pursue and strengthen tax administration in order to meet budget expenditures this year.
At the end of the December 31, deadline to qualify for the current moratorium, a 10% surcharge will be incurred by those behind in the payment of taxes on income or property.
According to some taxpayers this measure represents a "...
The private sector is opposed to the conditions in the third reform package the outgoing government intends to implement, claiming that state expenditures should be reduced first.
More control of public spending and no new taxes are the demands from employers to the government, which aims to increase government revenues with a third reform and the issuance of $800 million in bonds.
The reforms include provision for a fine for non payment of partial income taxes, facilitation of tax refunds, and streamlining of tax collections on luxury homes.
The Legislature has approved the "Project for urgent reforms of the tax administration", the first of the proposals included in the tax reform promoted by the Chinchilla administration in the package entitled "Solidarity Tax Act."
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