Deputies complete study of proposed changes to the Tax Reform
7 septiembre 2018

Congress’s special Committee presented the report of the tax reform bill of the Executive, which increases the income tax, make use of financial intermediaries as withholders of taxes and replaces the Sales Tax with the Value Added Tax (VAT). It is estimated that next week, the initiative will be submitted to the floor of the National Assembly where MPs will be able to suggest amendments so that the initiative can be studied again in the Committee.

 

Members of the Committee agreed to discard the collection of Value Added Tax in free zones. In addition, a 20% tax on the deduction of Gross Income for non-financial investment funds, the application of international accounting standards and the special rate for cooperatives was incorporated into the reform. It is expected that the initiative will be submitted to the plenary next week, when the committee presents the report of proposals of studied modifications. In this way, the National Assembly would allow MPs to propose the same amendments submitted in July or August that were rejected.

 

The current consensus provides for a 1% tax on the basic food basket and exempts private education from taxes. The Minister of Finance, Rocío Aguilar, had to agree with these terms to ensure the progress of the reform, although she wanted to impose taxes on both sectors in the first place.

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