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Latin America Investment News on Viva Tropical

Temporary Security Law Taxes Killing Hondura’s Competitiveness

Article Summary:

The recently imposed bank withdrawal tax, known as the Temporary Security Law Tax of Honduras, is “killing the competitiveness” of the country by taxing more heavily the production costs of enterprises, complain leaders of private enterprise and exporters.

Photo Credit: La Tribuna

Original Article Text From La Tribuna via Google Translate :

“Tason” is Killing the Country’s Competitiveness

Population Rate Security is “killing the competitiveness” of the country by taxing more the production costs of enterprises, yesterday questioned leaders of private enterprise and exporters for a week of the term of the tax on banking transactions.

The tax applied to banking transactions will cause a strong impact on exports.

With this measure seeks to raise between $ 2.000 million and 3.000 million lempiras per year, of which 1.500 million will strengthen the Secretariats of Security, Defense, Public Ministry (MP) and Supreme Court of Justice (CSJ), and the rest for social work.

Require employers to Congress (NC) reform provisions contained in Decree 105-2011, as they were not heard when it was first amended on September 14, 2011, and second chance last week.

What more is in dispute with this reform is the risk you run with increasing lempira devaluation against the dollar that without this tax has depreciated by 45 cents, hitting imports of goods and commodities.

The importer of raw materials in the field of plastics in the north coast, Oscar Galeano lamented that as the troubled decree applies observations arise that must be rectified by the legislature.

“The law enjoins the products consumed by the people and secondly reduces the competitiveness at a time when we try to fight production costs in countries of the region.”

He explained his case on imported resin. “When I issue the check to the bank to buy dollars that check will not be taxed, but when I give the bank the dollars and send them through a transfer to my supplier of raw material there if they’re going to punish” .

According to Galeano, the resin is so expensive that referrals amount to $ 35.000, about 679.000 lempiras and double it by way of charges, would be paying 1.358 lempiras for a transfer and your company just made up to 30 transactions per month, equivalent to 40,000 lempiras.

“It’s a tax that does not exist in the region’s countries were asked in advance to Congress to stop sending free transfers, specifically in the field of buying and currency auction.”

He noted that there are raw materials that have a high value FOB (Free On Board – FOB Spanish) and bangs the costs of companies. “At some point will be so strong that somehow moved to the costs of products.”

“I do not pay the rest of industrial America, to rule the Central Bank of Honduras that will particularly impact on product costs and competitiveness.

The president of the Honduran Council of Private Enterprise (COHEP), Amilcar Bulnes agrees that the rate of Safety Population is damaging to the country’s competitiveness. “We see no intent on the government to reduce its size and budget, uses tax burden that will ultimately affect the economy.”

Before reform, the law also provided for in Article 9, paragraph 1, the exemption for electronic transfers or by check to be made between accounts of the same person or entity within the country, either in the same institution financial or other institution.

However in the last reform, eliminated the check as a transfer medium, presumably to benefit large depositors, reducing the benefit to electronic transfers.

One of the most serious problems, affecting the constitutional principles of generality and that there can be no privileged classes. But the law violates the rule in different ways. Recording companies and some activities and exempting others. Places the financial disadvantage compared to other operators covered by the system.

Banks were able to be exempted from payment of 0.2 per thousand when they make withdrawals from their own accounts to pay salaries, purchase of goods, payment for services, among others. Purchases of raw materials and intermediates formed in 2011, the main item imported with an annual increase of 27.1 percent compared to 2010.

Only raw materials for agriculture reached 352.5 million dollars, ranging from 48.9 percent, reporting an 4.3 percent share in total imports.

Honduras recorded dependence on imports from January to November 2011, amounted to 8181.3 million compared to $ 3,546.2 million in exports. The trade balance in this period reached a deficit of 4,635.1 million dollars, up 14.6 percent observed in the same period in 2010

Link to Original Article:

From La Tribuna

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