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 Honduras, Congress extended for two more years the validity of the Law to Support Micro and Small Enterprises, which grants benefits such as exemption from payment of income tax and other taxes.
To opt for the benefits granted by the law, interested parties must process their permits, national and municipal licenses for its operation, reports a statement issued by Congress.
"Public debt in terms of simple average for the Central American region will continue growing, reaching 43.1% of GDP in 2018, after having registered 42.5% in 2017."
The Central American Institute of Fiscal Studies (Icefi) estimates that for the current year the size of public expenditure of the Central Government in relation to the respective Gross Domestic Product of each country will be 21.4% in Costa Rica, 20.4% in El Salvador, 20% in Honduras, 18.4% in Nicaragua, 17.6% in Panama and 12.1% in Guatemala.
The Congress approved extending until December 31, 2017 the deadline for the period of amnesty for tax and customs fees contained in article 213 of the Tax Code.
From a statement issued by the Congress of Honduras:
September 27th.The Mobile Congress held in Choluteca on Wednesday, approved a decree aimed at extending the amnesty until December 31, 2017, for tax and customs fees contained in Article 213 of the Tax Code, amended by Decree 32-2017 .
The good functioning of the institution in charge of collecting taxes is vital for ensuring economic development, as it means that honest companies who comply with their fiscal obligations are not at a disadvantage to those who don't.
EDITORIAL
In Costa Rica, better administrative management has made possible better income tax collection figures than those foreseen with simple tax increases.
In Costa Rica, the Ministry of Finance is using a predictive model designed with data mining techniques to determine the behavioral patterns of companies that might be circumventing tax payments.
Analyzing and crossing checking historical information from multiple databases, the statistical model used by the Directorate General of Taxation attempts to predict which companies are more likely to evade paying taxes depending on their historical behavior measured through transactions, tax returns and other data.By linking all of the information, they identify patterns of behavior similar to those of other companies that have evaded taxes in the past.
The amendment to the Tax Code, partially approved by Congress, omits the concept of "global income", and establishes "territorial income".
Latribuna.hn reports that "...The Bill for a new Tax Code was drafted by the government, employers and a sector in the social economy, and during the dissemination it was said that the change to "Territorial Income represents a setback in the fight against capital flight."
According to the ICEFI, "tax incentive policies seem to be a lost opportunity because of permanent tax expenses and the lack of tangible social benefits."
From a statement issued by the ICEFI:
Within the framework of the international meeting on Tax Justice and Transnational Fraud, held in Costa Rica, a study was presented on October 20 entitled 'The effectiveness of tax incentives for investment in Central America' in which an analysis was undertaken of the Central American experience in investment attraction through tax incentives.
A bill prepared by the Executive and the private sector includes the concept of a single tax and the creation of an administrative court for tax matters.
The bill must now be analyzed and approved by Congress. In addition to regulating exemptions, the new code creates theSuperintendency of Tax and Customsand the Tax Administration Department.
Legal tax engineering is a mandatory business practice for anyone who wants to be competitive in today's globalized world, and only those who are not entrepreneurs can afford to refuse to acknowledge this fact.
EDITORIAL
With the same firmness that we criticize businesspeople who evade taxes or bribe officials to get a contract, we must defend every business practice which is framed within the law to pursue the best use of available resources to generate wealth through the production of goods and services, which is what businesses do.
A proposal has been made to include new revenue figures, notify companies via email and to make audit processes simpler.
The bill that the Executive Directorate of Revenue has under public consultation envisages changes in the mechanisms through which requests are received or delivered as well as notices regarding tax payments. Laprensa.hn reports that "...
The private sector has denounced that on top of the negative effect of the new tax of 1.5%, are delays in the payment of $19 million in tax refunds.
Added to this is the cost for companies of undergoing tax audits required by the Executive Directorate of Revenue (DEI) to justify their financial position and request an adjustment in the payment of 1.5% of income tax to be paid by those generating sales of over $456 thousand.
Less complex administrative systems and a simplified tax system are the requests made by the private sector to the government in order to improve the country's competitiveness.
In order to improve competitiveness and the business climate, the Honduran Council of Private Enterprise has asked the government to simplify the tax code and streamline public procedures.
Regulations on the Act Strengthening Shrimp Farming provides for the issuance of a certificate of registration for those engaged in the distribution and marketing of shrimp.
The Executive Directorate of Revenue (DEI) will oversee shrimp transport units and establishments that sell them in order to achieve better tax control of this economic activity, which represents one of the largest in the southern region.