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.
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.
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.
Calendar of payments for obligations corresponding to February 2018 and Tax Memorandum on the regulations on factoring.
From a memorandum by Tezó y Asociados :
In the Diario de Centro América dated February 22, 2018, Decree number 1-2018 was publishedwhich contains the Law on Factoring and Discount Contracts, whichwill be in force from August 22, 2018.
Payment schedule for obligations corresponding to October 2017 and Tax Memorandum on amendments to the Commercial Code.
From a Memorandum sent by Tezó and Associates:
In the newspaper Diario de Centro América dated October 31, 2017, Decree number 18-2017 was published containing reforms to Decree number 2-70 of the Congress of the Republic, Guatemalan Commercial Code, valid for ninety (90) days after its publication.
Memorandum on which defects and omissions with the Superintendency of Tax Administration create tax contingencies and how to manage them.
From a tax memorandum by Tezó y Asociados:
Have you checked if you have tax contingencies?
Not only the omission of payment or incorrect payment of taxes generates tax contingencies, but also non-compliance with formal obligations; for example:
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 good functioning of the institution in charge of collecting taxes is vital for ensuring economic development, as it means that honest companies who comply with their fiscal obligations are not at a disadvantage to those who don't.
EDITORIAL
In Costa Rica, better administrative management has made possible better income tax collection figures than those foreseen with simple tax increases.
In 2016 the size of the governments in the Central American countries grew very little, the tax burden reached 14.3%, and the average fiscal deficit was about 2.8% of GDP.
From the department of Fiscal Outlook for Central America, from the report "Macrofiscal Profiles: 7th Edition", by the Central American Institute for Fiscal Studies (Icefi):
Changing how tax credits are returned is one of the proposals put forward in the reform of the rules for the VAT Act proposed by the tax authority.
Three years after the last modification to the regulations of the Law on Value Added Tax came into effect, it has been proposed that it be re-edited, in order to improve and streamline the audit processes.
Without setting a date for a new proposal, the Executive has asked Congress to return the controversial bill.
After receivingcriticism because of the absence of reforms in the control and transparency of public expenditure, the Executive has requested the withdrawal from discussion in Congress of the tax reform bill, which aimed, among other things, to raise tax on the distribution of cement, mining and fuels.
Absence of initiatives to cut spending and lack of dialogue with the business sector are the main criticisms of the tax reform bill proposed by the Executive Power.
In addition to the expected impact on the productive activities that will be affected, such as mining, one of the criticisms of the project is the absence of issues related to transparency in the use of resources, a key issue after the corruption cases revealed in 2015.
The proposal raises income tax from 25% to 29% for profits of over $38 billion a year, royalties for extracting gold and silver from 1% to 10%, taxes on fuels and a tax of $0.65 tax per bag of cement.
Seedocumentby the Ministry of Finance of Guatemala with details on each tax increase.
The countries facing the greatest risk of fiscal unsustainability within three years are El Salvador and Honduras, followed by Costa Rica and with less risk, Nicaragua and Panama.
From the "EconomicOutlook"section of the V Report on the State of the Region 2016:
The tax reforms proposed by the Morales administration could include a new tax on telephony and increases in taxes on cement, hydropower and alcoholic beverages.
The amounts and characteristics of the taxes are still unknown, but at a meeting between representatives of Congress and the Executive Branch details were given on the productive activities that are included in the government proposal.
español
6404
