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Latin America Investment News on Viva Tropical

Nicaragua: Tax Evasion Totals More than $800 Million, Earning Country Top Spot

Article Summary:

In Nicaragua, tax evasion totals more than $800 million, which earns the country a top spot on the list of value added tax (VAT) evasion in Latin America.

Original Article Text From Confidencia Google Translate :

Nicaragua: Tax Evasion Totaling More Than $ 800 Million

Although Nicaragua collects about 18% of its gross domestic product (GDP), levels of avoidance, evasion and exemption in the country, make it clear that the Treasury could increase its revenues significantly by simply closing the gap that allows other 12% stay in the pocket of taxpayers.

In statements on the Tonight program, the tax expert Julio Francisco Báez said the system prevailing in Nicaragua exemptions equivalent to forego “between 4 and 5% of GDP, national wealth … which adds a bit over 300 million dollars. If we add the 7% evasion, which is not paid represents 12 or 13% of national wealth (over $ 800 million) that leaks through the sewers. ”

Baez cited studies in which regional tax Nicaragua appears to “between 35 and 50% avoidance of income tax (IR). Let the conservative 40% of IR is not paid. In terms of value added tax (VAT), Nicaragua is little honorable first place among a select group of countries in Latin America, thanks to our VAT evasion rate is 38.1%. ”

“This is because there are companies that have formal double counting, to avoid paying taxes for that country. In conclusion, we are talking about 12 or 13% of gross domestic product that is not paid by exemptions and evasion, and evasion within a walking IR by 40% and VAT goes almost 40%. So is Nicaragua. ”

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Despite this scenario, the state has all powers to reverse and correct the situation, with that “I do not think there is a Nicaraguan who defend the exemptions are not justified: the exemption is not justified must die. You have to check them all and be courageous in making decisions, “he suggested Baez.

This will involve “applying sanctions to prevent evasion” and “not to return to return, or say, do not return it. Also works ‘sharpen the pencil’ and apply the law without changing anything. ”

But before we get to review the taxpayers, “must be substantially revised the tax administration: there must be people with masters and doctorates to take charge of handling it, and to ‘sell’ security to citizens, even if it means give you more budget to the DGI. Reform can be done in stages, beginning with the administration, which guarantees you with just that, raising revenues by 1%, “he said.

He continues later the eternal election campaign promise to “broaden the base”, which is achieved by incorporating new contributors, but also by growing the amount of the proceeds.

Referring to the tax reform to be undertaken in the coming months, Baez insists that “people, academics, civil society, national institutions must participate in the negotiations to create this new reform.”

At the same time, recommended “that no fiscal year ends June 30, for approving the new reform, it begins with the new fiscal year.

Baez called scholars, universities, unions, and associations, to present at this inescapable national debate and announced that from Easter week, be prepared to answer questions and discuss proposals for the readers, through www.confidencial.com.ni

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From Confidencial

Latin America Investment News on Viva Tropical