Although the banks had sought to extend the term, starting September 1 entities must charge 0,25% on operations over $1000.
From September 1 banks, credit unions and savings and loans companies must withhold 0.25% for every transaction in made in cash, by check or electronically worth over $1,000.
The Directorate General of Internal Revenue, at the Ministry of Finance has published the regulations that refer to the new taxes.
Limiting the deduction of interest from income tax and eliminating the exemption from payment of 15% for dividend distribution between companies are part of the changes included in the project.
The Bill to Improve Anti-Tax Fraud, presented by the Ministry of Finance amends various tax issues that must be taken into consideration by companies operating under Costa Rican law.
As part of the tax reform promoted by the government a tax has been approved on financial transactions and changes have been made to income tax.
From a statement by the Legislative Assembly of El Salvador:
Companies with more than $150,000 in sales a year will pay a minimum tax rate with the new tax reforms.
During the plenary session on Wednesday approval was given, with 44 votes, to amendments to the Law on Income Tax, which aims to establish a minimum payment of one percent (1%) on net assets, for companies that have more than U.S. $150,000 in sales a year, and who declare taxes lower than that percentage.
Excluded from financial transactions which would incur tax under the fiscal reform are transactions made with credit cards and amendments will be made to the property tax which affects the construction sector.
Meeting the demands of the construction industry is one of the modifications being contemplated in the reform of the text is to adjust the amounts of the 'floor' on property taxes, "... relative to luxury properties."
The package of new taxes proposed by the government of El Salvador will raise the price of the stock trading and the business of repurchasing shares.
The tax reform would not only reduce the profitability of the business, but would also make the resources accessible to the government, when it comes to the local market to issue bonds in order to finance public investment projects, more expensive.
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.
1.5% of total gross sales must be paid even if the company does not generate profits.
As provided for in Article 22-A of the Act on Public Finance Planning "... all companies with earnings of 10 million Lempiras ($480,000) per year must pay 1.5 on their gross sales even if they have had losses."
The business association opposes this tribute "... it affects the economics of their business because gross sales do not determine profits of the business "... and they are considering taking legal action against the provision.
Warnings have been given that the tax in the approval process in the Legislature would create more evasion affecting all sectors of society.
The new tax would be of 0.25% on financial transactions exceeding $750, applied to the deposit holders who ordered payments or transfers and financial entities performing loan disbursements of any kind.
Added to the normal negative effects of a new tax, such as being an incentive for evasion, discouragement of investment, and in this case generation of inflation, are also "... The ambiguity in the wording ... "it is not clear if this excludes tax remittances, since ' ... the majority of remittances entering the country are money transfers to third parties using an electronic system.'
The private sector is opposed to the conditions in the third reform package the outgoing government intends to implement, claiming that state expenditures should be reduced first.
More control of public spending and no new taxes are the demands from employers to the government, which aims to increase government revenues with a third reform and the issuance of $800 million in bonds.
Employers are complaining that the lack of clarity over how the income tax law is applied is generating legal uncertainty.
The law on income tax that arose from the tax reforms two years ago is still raising doubts among private entrepreneurs, who believe that the lack of clarity on how it should be implemented not only casts doubts and causes legal uncertainty, but also generates more informality.
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 Government has abolished the regulations of the Tax Coalition Law which created new taxes and fiscal measures.
Jose Adam Aguerri, head of the Superior Council of Private Enterprise announced that the regulations on the Tax Coalition Law will be canceled by the Government of the country.
"President Daniel Ortega signed an order repealing the controversial decree 06-2014 containing the regulations.
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.
The Costa Rican Chamber of Food Industry notes that new taxes will lead to the informalisation of the activity.
From a press release by the Costa Rican Chamber of Food Industry (CACIA):
An encouragement to informal work and unemployment, is how the Costa Rican Chamber of Food Industry, CACIA, sees the proposed Fiscal Consolidation Programme of the Government, as part of an economic situation which is in no way adequate for the collection of taxes.