In the midst of Nicaragua's political and economic crisis, the National Assembly approved a tax reform that increases the income tax of large taxpayers from 1% to 3%.
On the morning of February 27th, the reform of the Tax Concentration Law was approved, which also contemplates raising from 1% to 2% the income tax for medium sized companies with higher incomes.
The new tax reform proposal presented by the Ministry of Finance of Costa Rica includes the creation of a global income system to impose and collect a tax on the profits of companies and individuals.
Taxing all of the profits of natural and legal persons, including those currently paid separately by the identity code income method, is the principal new feature of the new tax reform plan presented by the Ministry of Finance.
The Vice President and the Minister of Finance have insisted that the Assembly adopt a draft law to establish global income and convert the sales tax into value added tax.
This December is the date set for the plan to convert to sales tax into value added tax (VAT) and for the first quarter of 2015, the bill on global income. Also in 2015 a draft law will be submitted on the Framework Law on Exemptions.
Although rates of income tax for employees have decreased, so have deductions and exemptions, meaning that ultimately the taxpayer will pay more than before.
Prensalibre.com reports that "the rates still in effect in 2012 are those of 15%, 20%, 25% and 31%, which will be charged up to 2012, and the new rates in 2013 are 5% and 7%. "
"Medical expenses and certain insurance or pension funds can no longer be deducted.
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The executive power has formally withdrawn the Law on Tax Breaks and Rationalization of Public Expenditure Control to Strengthen Public Finances, known as "paque-tito" in Spanish.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.
The bill was approved on its first reading; the final vote depends on the decision of the Constitutional Court over an appeal on the legislative process.
After 15 months in the drawers of the representatives of the Legislative Assembly, the tax reform bill passed on Wednesday in the first debate with the support of 31 MPs and 19 votes against.
"If approved, the Government would have tools to collect the equivalent of 1.5% of GDP (about ¢350,000 million, some $687.82 million) in new taxes, through a tax on value added (IVA in Spanish) and reforms on income and the selective consumption tax, among other changes," reported Nacion.com.
Cacif, leader of the Guatemalan private sector, said that "we must all do our part" and promised a consensus with the government.
The presidents of business chambers of Guatemala met on Wednesday with President Otto Perez and Finance Minister Pavel Centeno, to hear a proposal for tax reform law, and adopted a positive approach to the coming changes.
The bill provides that no amounts may be deducted from VAT on purchases, and increases the tax base for the payment of income tax.
The Guatemalan government’s tax reform law is ready, and contains several new points: employees ability to deduct VAT from annual purchases from their taxes has been eliminated, the tax base has been increased, and the road tax for vehicles has been doubled.
The Superintendency of Tax Administration of Guatemala has reported revenues of Q10 billion ($ 1.27 billion) in 2011, a record in the collection of income tax.
Revenues for the payment of income tax (ISR) totaled about Q10 billion ($ 1.27 billion), in 2011 according to the Superintendency of Tax Administration of Guatemala (SAT).
"The good results obtained by the companies are due to the recovery of the Guatemalan economy, and measures implemented to combat tax evasion by the SAT also helped the collection of income tax (ISR) to exceed Q 10 billion in 2011, an increase of 30 percent compared to the Q7.74 billion ($ 989 million) in 2010 , " published ElPeriodico.com.
ANEP, the Association of the Private Enterprise, stated its regret with the recently approved tax hike.
ANEP press release:
Regarding the tax increase approved by the FMLN, GANA, PCN and PDC, the National Association of Private Enterprise, ANEP, declares:
1. We lament that the representatives who voted for more taxes care more about what the government offers them in exchange for their votes, than the consequences of causing unemployment and deepening poverty in El Salvador.
The tax on corporate income will rise from 25% to 30%, while tax on dividends will be reduced.
The legislative body of El Salvador has approved the fiscal reforms promoted by the Executive, with 66 votes in favor and 17 against.
The major changes include increasing income tax for businesses, which will raise to 30%, except for companies with revenue of less than $150,000, who will continue to pay 25%.
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 political agreement reached between President Chinchilla and the opposing party Acción Ciudadana (Citizens Action) may ensure the speedy adoption of the tax package.
Elfinancierocr.com published an instructive analysis of the likely impact of the tax plan promoted by the government and currently under consideration in the Costa Rican Legislative Assembly, where it has been give a "fast track" status.
The coffee sector has announced its opposition to a proposal to establish a 5% surcharge on Income Tax (ISR in Spanish) for the agricultural sector.
A press release by Anacafé states:
The Guatemalan coffee industry via the National Coffee Association, Anacafe, has expressed concern about the establishment of a 5 percent surcharge on Income Tax,, referred to in the draft Anti-Evasion Act II which is now being considered in the Congress of the Republic. Political parties in their current campaigns have said that they will not raise taxes, their representatives in the legislative body have already made agreements to approve them.