Aiming to increase tax collection by $210 million, the congress of Honduras passed a new set of taxes.
This bill modifies sales, income and some consumption taxes. Considerable tax hikes were applied to production and sales of cigarettes, beer, alcoholic beverages and sodas.
Elheraldo.hn reports that taxes for importing luxury cars were also increased, and that some levies aimed to middle-lower income citizens were ‘eased’, and some ‘removed’.
2010 will be a difficult year for the region's Treasuries, and tax reforms will be one of the weapons used by governments to fight this crisis.
Nicaragua has recently passed a highly controversial fiscal reform. Panama approved tax hikes for companies in the Colón Free Zone, as well as tobacco, casinos and insurance companies. In Guatemala the government proposed a tax reform to increase the tax burden, which includes raising income tax from 5% to 6% and taxing mobile communications. The Salvadoran government intends to raise taxes to alcoholic beverages, tobacco, weapons and ammunition, as well as vehicle registration and commissions at insurance companies.
"If we want first-world services, we must pay first-world taxes" - Laura Chinchilla.
The tax burden in Central America hovers between Guatemala's 9.9% and Nicaragua's 17%. In Brazil its 29%, whereas Scandinavian countries have tax burdens around 40%.
Tax collection has been hardly hit by the economic crisis, making evident the need for fiscal reforms to solve the structural problems of the region's tax systems.
Despite a fall in imports, with the new Automated system "Sarah", customs income rose 10% to 15%.
During its first months of operation, the Honduran Automated Customs Rents System (SARAH, acronym in Spanish), was criticized by exporters and customs agencies, who complained of complications and difficulties using the system.
Elheraldo.hn publishes: "Inés Zablah, board member at the Commerce and Industries Chamber of Honduras, assured that Sarah implementation at customs has been better in the last weeks".
For the first time this decade, the government adjusted tax revenue collection downwards from $2.43 billion to $2.27 billion.
Luis Rodrigéz, wrote in El Heraldo of Honduras: "The Ministry of Finance (SEFIN) planned to raise $2.430 million, however, that figure was reduced to $2.270 million after learning that customs revenues experienced a decline due to the reduction in the import of goods.
Countries in Central America have interesting tax systems that have converted the region into an attractive market for foreign investment.
Rita María Silva, a partner at Deloitte Tax in Honduras, argued that countries in the region have created attractive environments for investors to come and do business.
In the case of Honduras, she pointed to the example of the 12% Sales Tax (ISV) which taxes the purchase and sales of goods and services and 15% for the sale and import of alcoholic drinks and tobacco products.
The Executive Revenue Office (DEI) has launched an internet service called "DEI online."
DEI online is specifically designed to help tax payers fulfill their tax obligations (declarations, payments, etc) while taking full advantage of technological advancements.
It is official: Latin Americans pay less taxes that almost all of the inhabitants of the other regions of the world.
Two new studies by the United Nations Economic Commission for Latin America and the Caribbean (CEPAL) show that tax collection by Latin American governments is not only below that of the 30 most industrialized nations of the world, but that it is also lower than that of southeast Asia and Africa.