In Honduras, rebates and discounts applied to sales should be detailed on the invoice, a change with which the business sector would disagree if the government decides to collect taxes on the discounted amount.
On March 1, the changes to the invoices, which were imposed by Agreement 817-2018, came into effect. Among them, it is important to note that the fields for discounts and rebates must be included in the format of the document.
On average, companies in the region pay 45.8% tax on profits, while companies in OECD countries pay 41%.
From the study Evolution of the fiscal situation in Central America, by the Federation of Chambers of Commerce of the Central American Isthmus (FECAMCO):
FECAMCO has carried out a study with the objective of showing the fiscal situation in Central American countries and raising awareness in governments about the efficient use of taxes that are collected from the payment of citizens to guarantee solvency of the states.
The Executive Branch has returned to Congress the decree amending the basis for the first tranche of Income Tax considering that it compromises public finances.
From a statement issued by the President of Honduras:
Tegucigalpa, March 8. President Juan Orlando Hernández vetoed the decree amending Article 22 of the Law on Income Tax (ISR), which proposes exempting from the tax workers earning less than 15,087 lempiras ($700).
The Supreme Court has not ruled in favor of the union of private companies, which sought to suspend the collection of income taxes of 1.5%.
Businessmen from different sectors showed their discontent after the Supreme Court rejected the appeal by the Honduran Council of Private Enterprise (COHEP) and announced that the collection of the (ISR) tax will remain in place.
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.
The Constitutional Court has rejected the constitutional challenge presented by the business sector and left in place the collection of 1.5% income tax.
The Supreme Court has confirmed the income tax of 1.5%, which applies to companies reporting net sales of over $456 000, leaving exempt from this charge those reporting lesser incomes and those with less than two years of being established.
The private sector has filed a constitutional complaint against Article 22-A of the Tax Act on income tax arguing that it distorts fundamental tax principles.
From a statement issued by the Honduran Council of Private Enterprise:
As entrepreneurs we have supported the planning processes of public finances to improve tax revenues and the controlling of public expenditure, which allow for the signing an agreement with the International Monetary Fund (IMF). Tax burdens should be clear and simple, non-discriminatory, fair and universal, as established by our constitutional system.
The asymmetry of investment flows makes the application of the concept of world income inevitably generates more revenue to the states of powerful economies than those of small ones.
In his opinion piece in Elfinancierocr.com, Manrique Blen points to the difficulties that countries with small economies face when they sign double taxation treaties, as, depending on the characteristics of the signed agreements, they can stop receiving tax revenues that they could have received had they not joined the treaty.
A law decree under discussion in Congress seeks to grant a tax amnesty on penalties and interest to taxpayers with outstanding accounts with the State.
The draft submitted by the secretary of the CN, Rigoberto Chang Castillo, would grant amnesty to tax charges such as taxes and contributions for improvements, fees, surcharges, fines and surcharges, which must be paid no later than July 31 of the current year .
The increase in the income tax payment affects services for cable television, air tickets and public entertainment among other things.
The project submitted by the Ministry of Finance had been suspended by the National Congress on the grounds that such increases ultimately affect the end consumer, but discussion of the project was later taken up again.
A bill introduced by the Ministry of Finance has increased from 10% to 25% taxes paid by natural or legal persons who are not resident in the country.
According to an article in Elheraldo.hn "In order to raise about 100 million lempiras [$5 million], the authorities of the Ministry of Finance presented to the plenary of the National Congress a bill to increase from 10 to 25 percent several tributes levied on natural or legal persons not resident in Honduras. "
The Honduran Council of Private Enterprise says that reform of the Law on Income Tax is unconstitutional because it is confiscatory.
An article in Elheraldo.hn reports that "The Honduran Council of Private Enterprise (COHEP) argues that legislative approval of the Evasion Measures Act to income tax is unconstitutional, confiscatory and violates a judgment of the Supreme Court dated February 1, 2012. "
The executive power has formally withdrawn the Law on Tax Breaks and Rationalization of Public Expenditure Control to Strengthen Public Finances, known as "paque-tito" in Spanish.
The initiative had been returned to the Ministry of Finance by the Legislative Budget Committee, which requested more details about which exemptions would be eliminated.
"Representative Francisco Rivera said that another aspect to be reviewed is that the budget has large discrepancies related to tax collection, and that ‘we will not be able to obtain the necessary resources to finance these expenses. Given the reality, that we do not have the necessary resources, we must reduce the size of the government and make it more efficient'" reported latribuna.hn.
And apparently for bureaucracies in general, including those of international organizations; an "expert" from the Inter-American Development Bank is supporting tax reform in Costa Rica.
Although officially the IDB "does not advocate a tax burden or specific tax policy," one of its officials warmly supports the project to increase the tax burden to support the Costa Rican economy, to the point of suggesting that the tax burden be similar to Argentina’s.
The Honduran Council of Private Enterprise will file an appeal of unconstitutionality over the decree that imposes a 1% income tax to those who declare losses.
Armando Urtecho, executive director of the Council indicated that Decree 42-2011, violates the constitution, and therefore does not count as an appeal but an action of unconstitutionality.
The decision was confirmed by the extraordinary meeting of presidents of the unions affiliated to Cohep.