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.
On average in Costa Rica more than one in five companies classified as Large Taxpayers do not pay taxes.
EDITORIAL COMMENT:
When the Tax Department does not fully complete its duties, competition between companies is settled not by the quality of products or services, or for the excellence of its managerial staff and their strategic direction, but for the ability of their tax advisors to reduce the amount of taxes paid.
"Of the total potential tax collection from VAT, only 50% is charged, with 19% being lost from exemptions and tax schemes, many without justification, while the remaining 30% is lost through evasion charges."
Extraordinary measures announced by the tax authorities will focus on reviewing withholding tax, declarations and verification of income tax.
Verification of statements of withholding agents, recalculation of retention for taxpayers with incomes over $3.886, monitoring omissions and frequent verification of cases of taxpayers of the higher tax interest, are part of the measures to be applied to the deficit of $87 million resulting from the last collection period.
Federico Linares, CEO of G & T Continental, stated the need for fiscal reform.
Linares believes that current tax burden of around 10.5% of GDP is too low to support development of the country, adding that a tax reform is essential, though it seems difficult especially in an election year.
For now, he said, administrative measures can be taken to improve tax collection, like focusing on smuggling and tax evasion as well as lost VAT, which amounts to about $ 670 million.
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