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National Tax Reforms Approved in Guatemala

Article Summary:

Guatemalan Congress has approved a national tax reform aimed to raise about U.S. $ 585 million in tax revenue over the next four years, and includes amendments to the country’s Income Tax and Value Added Tax. Guatemala has a tax burden equivalent to 11% of GDP, and business systematically rejects any action that imposes new taxes.

Original Article Text From Estrategia y Negocios via Google Translate :

Guatemala Congress approves tax reform urgently

Guatemala’s Congress on Thursday approved urgent national tax reform, aimed to raise about U.S. $ 585 million in tax revenue over the next four years, said its president Gudy Rivera.

The so-called “fiscal update” includes amendments to the Income Tax (ISR) and Value Added Tax (VAT).

The ISR will rise from 5% to 6% in 2013 and could rise to 7% in 2014, while doubling the tax on the movement of vehicles and prohibited the importation of vehicles with ten years old and in disrepair.

President Otto Perez pushed tax reform because Guatemala “is the country with less tax burden burden in Latin America, including Haiti, because this is where less tax revenue and there.”

Guatemala has a tax burden equivalent to 11% of GDP, and business systematically rejects any action that imposes new taxes.

“The reform will allow us to have more resources to the government, which will be intended for security, justice, rural development and social programs like Hunger Zero” to combat chronic child malnutrition, which affects 49 % of children under five, the highest percentage in Latin America, the president argued.

The right-wing Patriot Party, founded by Perez, was the main opponent to three tax reform initiatives that drove in four years the recently concluded government of Alvaro Colom.

Perez acknowledged on January 14 when he assumed the government that Guatemala is “a country in crisis” and “a nation very close economic and moral breakdown.”

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From Estrategia y Negocios

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