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.
The tax burden grew from 13.4% in 2013 to 14% in 2016, both due to the delayed effect of the tax reforms in Honduras and Nicaragua, as well as better management on the part of tax entities in Guatemala and Panama.
From the Regional Economic Report (IER) 2016-2017: Opportunities and challenges for Central America, by the SIECA:
The World Bank cites weak economic growth, low tax collection and low public investment as the factors affecting productivity and preventing greater economic development from being achieved.
Less taxes and consequently poor tax collection, coupled with limited public spending, are preventing Guatemala from achieving a better level of socioeconomic development, despite having achieved timid growth rates of GDP in recent years.
The International Monetary Fund is warning that adjustments are needed in order to increase tax revenues and reduce the state's fiscal deficit.
They note that "... the tax reform passed in 2012, which came into effect on January 1 this year, broadens the tax base and gives the government more tools to enforce fiscal and supervisory controls and eliminates tax exemptions and reduces corporate tax rates," noted an article in S21.com.gt.
Monthly Index of Economic Activity (IMAE), exports, remittances, international reserves, exchange rates, inflation, tax collection, banking system, foreign investment, tourism and outlooks.
Oscar E. Mendizábal, editor of the Blog “Desde Guate” (From Guatemala), gathers and analyses the main factors influencing the Central American economy (except Panama) during the first six months of this year.
Central American countries alleviated much of the effects of the global crisis by issuing public debt; they now face the challenge of keeping it at reasonable levels.
Capitales.com analyzed the relation between debt and GDP for each country in Central America. They noted that although Costa Rica, Guatemala and Honduras are within acceptable levels, they are dangerously close to surpassing them.