"If the consumption of a product is legal, so is its trade." Although the Guatemalan proposal to free up export of of the drug will surely kick up some dust, its logic is unassailable.
Editorial
The legalization of marijuana in Uruguay and the U.S. states of Colorado and Washington has opened a door for a proposal by Guatemala to legalize its production and export.
Guatemala's foreign minister in Europe has proposed a transition to the regulation of drugs in order to control their health effects, and to take away economic power from the drug cartels.
An article in Prensalibre.com reports that "The Chancellor took part in a seminar yesterday run by British Group of the IPU in which MPs from 30 countries discussed "the reform of drug policy" and the experiences of each nation over the last 18 months, particularly in the framework of the OAS (Organization of American States) . "
The mere announcement of the draft constitutional reform in Guatemala so that the State can participate as a partner in mining companies has brought down the shareholder value of Tahoe Resources by 22%.
An article in Elperiodico.com.gt reveals the uncertainty and the damage amonst investors and businesses caused by the announcement of reforms to the Constitution that would include authorization for the State to participate by holding up to 40% of the shares belonging to companies engaged in metal extraction.
The opening of the Desing Center corporate office buildings whose investment is $26 million, adds to the growing collection of new office centers in Zone 10 in Guatemala City.
The new center joins the 30 existing buildings and with them others whose construction is nearing completion, as is the case of the Sixtino II Building, the Interamerican Business Center, the Dubai Center and the Banco Industrial’s Tower 3 in Zone 4.
The Government could raise the Income Tax (IDS) to 6% and the Solidarity Tax (ISO) to 2%.
The proposal is being analyzed by a group of presidential advisers and the Ministry of Public Finances.
"ISO currently charges 1% over gross sales or net assets of a company...", reports Elperiodico.com.gt. "Another option being considered is raising the Income Tax (ISR) from 5% to 6%...".
Guatemala´s BB+ sovereign risk rating and stable perspective, which is so close to the desired “Investment Grade,” is facing four threats.
According to an article by C.Véliz and J. Gramajo in Sigloxxi.com, Mauricio Choussy, the director of Fitch Central America, notes that four weaknesses persist in the country: “Low tax revenue, weak social indicators, social instability, and high levels of delinquency.”
No matter who wins the elections, the country will need to resort to international loans to face the crisis.
The Central American Institute of Fiscal Studies (Icefi), will elaborate an analysis of the consequences of the financial crisis in the region, focusing on 4 of the main ways for the crisis to spread: remittances, commerce, tourism and foreign direct investment.
The extended exemptions from paying taxes in Guatemala haven't been effective for attracting foreign direct investment (FDI).
The 11 billion quetzales (about 1.458 billion dollars) in tax revenues that the government has decided to forego have not achieved the goal of attracting more capital.
A study released Tuesday says that reducing tax breaks and focusing on making taxes to existing business less onerous would be more productive for the nation.