Because fertilizers became more expensive due to the tax reform implemented last year, for the 2019-2020 agricultural cycle the volume demanded in the country fell by approximately 220,000 quintals.
Distributors in the country estimate that with the Tax Concentration Law approved at the end of February 2019, fertilizer prices increased up to 17% and agrochemicals between 20% and 30%.
With the Nicaraguan authorities confirming that they will review the Tax Agreement Law again in 2020, the business sector is calling for the correction of several measures that have decapitalized companies operating in the country.
On February 27, 2019, the reform to the Tax Harmonization Law was approved, which consisted in raising income tax from 1% to 2% for medium sized companies with higher income, and from 1% to 3% for large taxpayers.
As a result of the tax reform implemented in February 2019, at the beginning of 2020 the prices of beverages increased, mainly soft drinks sold in plastic containers.
In February of last year, the Ortega regime approved the reform of the Tax Agreement Law, which consisted of increasing income tax from 1% to 2% for medium sized companies with higher incomes, and from 1% to 3% for large taxpayers.
As a result of the tax reform implemented in February 2019, Nicaragua tripled the tax burden on imports of all types of beverages, and nine months later, businessmen are still waiting for the government to review the collections.
On February 27, 2019, the amendment to the Tax Concertation Law was approved, which consisted of raising from 1% to 2% the income tax for medium sized companies with higher income, and for large taxpayers from 1% to 3%, the livestock sector has reported considerable increases in its production costs.
Although Costa Rica and Nicaragua approved fiscal reforms this year, it is predicted that the expected results in terms of tax collection will not be achieved.
The document "Centroamérica: análisis sintético, por país, del desempeño de la recaudación tributaria en 2019", prepared by the Instituto Centroamericano de Estudios Fiscales (Icefi), explains that, in the case of Costa Rica and Nicaragua, the expected results in terms of improved collection are still in doubt.
In Nicaragua, companies involved in the production of bread are facing several difficulties because of the increase in their operating costs, which derive from the rise in taxes and electricity tariffs.
The beginning of the year has been difficult for most of the productive sectors of the country and bakers are not exempt from this reality. On February 27, 2019, the amendment to the Tax Agreement Law was approved, which consisted of raising from 1% to 2% the income tax for medium sized companies with higher incomes. Another of the measures contemplated by the reform was to raise the income tax of large taxpayers from 1% to 3%.
In Nicaragua, there is uncertainty because the government is reviewing the tax reform without the participation of businessmen, and because adjustments to the minimum wage could be made in September.
Weeks ago, it was reported that when the government's review of the tax reform in force in the country since February is completed, businessmen consider that no tax cuts will be made, despite the fact that production costs in the country have risen considerably.
In the government's review of Nicaragua's tax reform that has been in place since February, businessmen consider that no tax cuts will be made, even though production costs in the country have risen considerably.
After the approval on February 27, 2019 of the amendment to the Tax Concertation Law, which consists of raising from 1% to 2% the income tax for medium sized companies with higher income, and for large taxpayers from 1% to 3%, the productive sector has reported increases in its production costs.
Businessmen in the industrial sector in Nicaragua say that since the tax reform was implemented in the first quarter of the year, employment has fallen between 30% and 35%.
On February 27, 2019 was approved the amendment to the Law of Tax Concertation, which consists of raising from 1% to 2% income tax for medium enterprises with higher income. Another of the measures contemplated by the reform is to raise the income tax of large taxpayers from 1% to 3%.
Businessmen in Nicaragua denounced that because of the tax reform approved by the Ortega regime, the tax burden on imports of all types of beverages has tripled.
Representatives of the Nicaraguan Chamber of Industries (Cadin) explained that before the tax reform that was approved last February came into effect, importers paid the tax on the total cargo of beverages in each import, but now it was ordered that this must be applied on the retail price of each of these products.
With the approval of the tax reform, in Nicaragua the period for exporting companies to transfer the tax credit to the producer or manufacturer was reduced from three to two months.
At the end of February, the National Assembly approved the amendment to the Tax Concertation Law, which increases from 1% to 3% the income tax of large taxpayers and also shortens the deadline for exporters to transfer the tax credit to producers, which is 1.5% on the value of FOB exports.
The socio-political crisis that Nicaragua has been suffering since a year ago, together with the recent tax reform, forces businessmen in the livestock sector to postpone investments in genetic improvement and technology.
Nicaragua's businessmen have been dealing hard times in the last year, because in the midst of the political and economic crisis that Nicaragua has been facing since April 2018, the National Assembly approved in early 2019 a tax reform that raises the income tax of large taxpayers from 1% to 3%.
In Nicaragua, the business sector is preparing an appeal of unconstitutionality against the Tax Concertation Law, approved a few days ago by the National Assembly.
In the midst of Nicaragua's political and economic crisis, the National Assembly approved a tax reform that increases the income tax of large taxpayers from 1% to 3%.
On the morning of February 27th, the reform of the Tax Concentration Law was approved, which also contemplates raising from 1% to 2% the income tax for medium sized companies with higher incomes.
In Nicaragua, the government plans to increase employer, labor, and state Social Security contributions, and to approve a tax reform that would increase taxes for medium and large companies.
Although the country has been in a serious economic and political crisis since April 2018, when the government tried to implement reforms to the Nicaraguan Institute of Social Security (INSS), the Ortega administration is once again trying to make changes to the institution, this time through an administrative resolution.
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