The Pros and Cons of the Tax Reform in Guatemala

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.

The Finance Minister Pavel Centeno, said the initiative also provides that those with annual revenues of Q5 billion ($640) or less do not have to pay income tax.

"The rates for the general scheme will be 6% next year and 7% in 2014, the 31% scheme will be lowered to to 28% in 2013 and 25% in 2014, but it is anticipated that there will be a tightening of the criteria that allows companies to discount their expenses against income tax", reported Prensalibre.com.

Source: prensalibre.com

More on this topic

Guatemala Puts Finishing Touches on Tax Reform

January 2012

Among other measures, the bill proposed by the government examines establishing regimes for income tax and eliminating accreditation for VAT returns, a method that has encouraged evasion.

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.

Employers Promise to Support Tax Reform Bill

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.

Congress of Guatemala Receives Tax Reform Bill

February 2012

A draft submitted by the Executive aims to reform six laws in order to increase tax revenues.

A press release by the Congress of the Republic of Guatemala reads:

The Board of the Congress, headed by Deputy Gudy Rivera, received on 3rd February a visit from the President of the Republic, Otto Perez Molina, who along with Finance Minister, Pavel Centeno and the Secretary General of the Presidency Gustavo Martinez, officially handed over a tax reform which seeks to reform six laws for the primary purpose of increasing tax collection and controling the pace of debt maintained by the State, which is growing.

Nicaragua Passes Tax Reform for Rice and Milk

February 2012

Although a reform reduces income tax (IR) from 1.5% to 1% for transactions of rice and raw milk in the bag, unsatisfied businesses are demanding that more areas be included.

The reform of the Fiscal Equity Act was passed on Wednesday (8th February, 2012) in the National Assembly by 85 votes, the majority of which were from the group of the ruling Sandinista Front (FSLN), and the opposition.