In Honduras, a law reform was approved that simplifies the procedures that local and foreign companies must follow to take advantage of the Free Zone Law and extends for 15 more years the benefits that it grants to the companies of the regime.
From the National Congress of Honduras' statement:
The law was more than 44 years old and needed to be updated to make Honduras competitive
Since November 26, the Guatemalan authorities have the power to access taxpayers' bank information for tax purposes, so they can now corroborate that the bank income of companies coincide with the payment of their taxes.
After the resolution of the Constitutional Court was published in the Diario de Centroamérica on November 25, in which the appeal of unconstitutionality filed by Escalas Mercantiles S.A., which was intended to prevent the authorities from having access to the banking information of companies and individuals, the law that empowers the Superintendence of Tax Administration (SAT) to investigate taxpayers has come into effect.
A proposal is made to amend the law in order to limit the granting of criminal dispensation to one time only when the amount of the tax obligation defrauded is paid before the first instance sentence or during the investigation phase.
The Ministry of Economy and Finance (MEF) will soon present a project to modify article No. 288-J of Law No. 70 dated January 2019, a proposal that is supported by the business sector.
For Fitch Ratings, the results of the General Elections in Guatemala put at risk the approval of reforms necessary for the development of the country, since the next legislature will be composed of deputies from 15 different political parties.
The deputies to the Congress of the Republic who were elected for the 2020-2023 period and who will take office on January 14, 2020, will have the challenge of directing efforts from the legislative in the area of economic development.
The country's Assembly has agreed to prepare a reform of the Budget Law to use the resources in the Citizen Security Plan.
The institution reported that the resources to be incorporated come from funds pending from the special contributions of the second quarter and from the funds collected in the last quarter, with total resources to be distributed amounting to $22,822,950.
The first meeting has been held of the technical panel, made up of the public and private sector, which will be working on a proposal to reform Guatemala's purchase and procurement system.
With the aim of preparing a proposal that will be sent to the Congress of the Republic, representatives from different private institutions and the Ministry of Public Finance (Minfin) met this week.
With the aim of boosting the insurance market in El Salvador, business leaders in the sector are proposing changes to the legislation that would allow for expanding marketing channels for policies.
After the Salvadoran insurance market recorded growth of 1% in 2017, bills have been prepared that have been submitted to the Presidential House, which seek to reactivate the sector, through the commercialization of microinsurance focused on people with low incomes.
More competitive prices, broadband expansion and number portability are some of the benefits that are not being taken advantage of in Guatemala because the regulations there have not been modernized.
The regulations in the country have been in force since 1996, and according to representatives from the sectors involved in the activity, they have become obsolete in some aspects, as coverage thereneeds to be improved and frequencies assigned in order to exploit the spectrum to the maximum.
Fitch Ratings is warning that the growing INSS deficit in Nicaragua and the failure of the reform which would have raised contributions of workers and employers, will increase the need for government financing, at about 0.6% of GDP per year.
From a statement issued by Fitch Ratings:
Fitch Ratings-New York-27 April 2018: The Nicaraguan government's rollback of social security (INSS) changes amid widespread protests will lead to increased general government financing requirements and debt in 2018 and 2019, says Fitch Ratings. The INSS cash reserves previously projected to last through 2019 are depleting faster than expected. The protests and violence over INSS changes also underscore political risks from an increasingly centralized policy-making process reflected in Nicaragua's weak governance indicators.
In Nicaragua, President Ortega has revoked the controversial law to reform the National Institute of Social Security, but demonstrations continue and business leaders are calling on the government to have a dialogue.
Five days of protests, looting and several deaths in different areas of the country is the result of the controversial reform that the Ortega administration announced on Wednesday, and which only five days later, it had to revoke in order to try to ease social tension.The reform aimed to raise the contribution paid by companies by 2% and employees' contribution by 5%, effective from July.The presidential decree 04-2018 was published this Monday in the Gazette number 76.
In Nicaragua, the private sector is opposed to the reform of the Social Security law recently approved by the Ortega administration, which increases the contribution quota of companies by 2%.
Loss of competitiveness, unemployment and greater informality is what entrepreneurs in Nicaragua predict would be the result of the reform of the Social Security law, which according to thepublicationin the official gazette, will come into force in July of this year.
If the reforms to the Banking Law that are being discussed in the Congress are approved, cooperatives will have to start reporting information in their loan portfolios.
Legal initiative number 5157which is pending final approval, proposes, among other changes, including in the Credit Registration Information System (SIRC by its initials in Spanish) information from financial institutions that are not yet sending reports.
The ICEFI states that the proposed reforms to the Free Zones Law in Guatemala encourage a public investment model based on tax privileges for specific groups of companies.
The Central American Institute of Fiscal Studies (Icefi) reiterates its arguments against continuing an obsolete and ineffective model of attracting public investment based on tax privileges for specific groups of companies and encourages the initiation of the discussion on a general investment law. For this reason, it does not recommend to the Congress of the Republic the approval of the reforms to the Law on Free Zones contained in the legal initiative with the registry number 5174.
With the modification of the Free Zones Law, it will now be possible to accumulate up to 25 samples which do not have a commercial value in a single declaration.
Jaime Campos, executive director of the Regulatory Improvement Organization, told Elmundo.sv that the reform "...'will help the investment climate in the country' because the reform introduces the concept of the 'accumulated goods declaration', which will allow imports or exports of up to 25 samples in a single declaration."
Salvadoran bankers warn that the reform of the Bank Law proposed by the government would reduce controls on money laundering, since banks would only be able to close accounts with a previously aquired official resolution.
The president of the Salvadoran Banking Association (Abansa), Raul Cardenal, stressed that "... the reform project aims to ensure banks have no power to close bank accounts, without just cause and without a prior judicial or administrative resolution issued by the General Prosecutor's Office of the Republic."