With a new methodology, the Banco de Guatemala determined that the value of the informal economy already adds up to the equivalent of 22% of the Gross Domestic Product.
The new calculation used by the Banco de Guatemala (Banguat) to measure national production now includes the measurement of the informal economy, mainly its participation in productive activity.
The higher the percentage of wages paid by employers, the less formal employment will be generated, particularly affecting unemployed young people and distorting the economy by rewarding informality.
This is notorious in Costa Rica, where despite sustained growth of the economy in recent years, unemployment remains at around 10% of the economically active population, and informality represents around 40% of employment.
The demand for credit by people who can not meet the requirements of regulated financial institutions, is favoring pawnshops and moneylenders.
Financial institutions operating under the official regulatory framework have requirements, as established in law, that many Guatemalans can not comply with when applying for a bank loan. This situation has resulted in an increase in the number of entities operating outside of the law, offering quick financing without a lot of formalities or requirements.
Among other criticisms it has been noted that the tax would encourage established companies to move towards informality.
The executive has rejected the proposal that individuals and organizations who operate informally pay a $20 annual tax, which was intended to expand the tax base.
According to the Guatemalan vice president, Roxana Baldetti, who proposed the tax, " ...
The Executive has proposed that individuals and business organizations that operate informally pay a single tribute of $20 a year.
The Guatemalan vice president, Roxana Baldetti proposed formalizing the informal economy through payment of a single annual tax of $20 which would apply to micro, small and medium enterprises operating in this segment of the economy.
An increase in informal employment and underemployment indicates a need to adapt the rules governing hiring people to the new forms of production.
EDITORIAL:
An article in Elfinancierocr.com reports that "More Costa Ricans are now working in the informal sector or are underemployed, visibly and invisibly. The National Household Survey 2011 by the National Institute of Statistics and Censuses (INEC) reveals this fact.
If many large companies are granted tax exemptions for long periods of time, why not give the same exemptions to SMEs?
The analysis of the topic in an article in Laprensa.hn on the high rate of informality in microenterprises in Honduras, can be extrapolated to all Central American countries.
"Figures from the deputy minister for micro, small and medium businesses indicate that of the approximately 297.000 companies that fall under the micro category, 60% remain in the informal sector, mainly due to tax burdens they would have to face in order to take that step. "