The new Guatemalan government has refined its proposed fiscal law reform, which includes proposals such as removing the accreditation of the VAT tax and setting different levels for the deduction of income tax.
"The workers who are employees currently can deduct up to one hundred percent of Value Added Tax (VAT) against ISR (Income Tax) through a form in which all purchases are included annually. Under this regime a deduction is allowed in the amount of Q36,000 ($4,609) per year, which is considered the minimum essential for an employed person", explains an article published by ElPeriodico.com.gt.
Discussions within the government have hit several obstacles, one of the most important ones is establishing how income tax (ISR) for employees will be collected.
Pavel Centeno, Minister of Finance, explained that "the proposal seeks to equalize income tax regimes. Regimes are established for gainful employment, wage earners, income from capital (dividends, interest, rents, royalties, etc.) and for non-residents", quoted the website.
Miguel Gutierrez, a consultant for Central American Business Intelligence (CABI), considers it appropriate to eliminate the VAT that is deductable from income tax and raise the poverty line to Q42,000 per year ($5,378). That is to say, workers who earn up to Q3,500 per month ($448). That would result in the end of invoices being sold and would broaden the tax base and prevent small companies from submitting invoices with VAT charges , Gutierrez argued.
Source: elperiodico.com.gt
More on this topic
January 2012
The bill provides that no amounts may be deducted from VAT on purchases, and increases the tax base for the payment of income tax.
The Guatemalan government’s tax reform law is ready, and contains several new points: employees ability to deduct VAT from annual purchases from their taxes has been eliminated, the tax base has been increased, and the road tax for vehicles has been doubled.
January 2012
Cacif, leader of the Guatemalan private sector, said that "we must all do our part" and promised a consensus with the government.
The presidents of business chambers of Guatemala met on Wednesday with President Otto Perez and Finance Minister Pavel Centeno, to hear a proposal for tax reform law, and adopted a positive approach to the coming changes.
June 2008
Guatemala's finance ministry began this week to send out information aboiut its proposed fiscal reform agenda.
Measures proposed include a total rewrite of the Income Tax Law and changes to the law governing the value-added tax (IVA). The goal is to raise the load on taxpayers from 12 percent of Gross Domestic Product (GDP) to 13.2 percent.
January 2012
Memorandum on "Minimum Wages 2012", and repayment schedule for payment of tax obligations for December 2011.
January 2012 Tax Calendar
The deadlines reported in this month correspond to obligations for December 2011.
Friday the 13th Schedule of VAT (January to December 2011) 1119
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