Our Constitution mandates that the tax system must be fair and equitable, but today this statement is more poetry than reality. Among the many injustices our tax system suffers from, we have international double taxation that punishes our service exporters and that nobody seems to care about, least of all our deputies. The plaint we have is not about exempting taxes or granting privileges, it is simply about our State fulfilling its duty to provide justice to Guatemalans and fulfilling its obligation to promote economic development and create the appropriate conditions to encourage investment.
The development of technology and communications today allows the provision of services from Guatemala to other countries without the need for Guatemalans to cross the border. However, all the projects devised to contain migration or reactivate the economy ignore the reality that the service export sector could grow if international double taxation did not weigh on us, which in turn would give rise to new jobs thanks to a policy of State that focuses on relieving Guatemalans from paying two or three times the taxes on the same productive activity, or wealth index when rendering our services abroad.
Presently, our service exporters are being punished by paying both their income tax in Guatemala and tariffs on their service exports in the country of destination, which forces them to raise their fees to 20 or 30% of the price at which they could compete or else relinquish a profit margin equal to these percentages in order to place their services competitively. In other words, to compete abroad, the sectors of technology, programming, graphic design, accounting, typing services, etc. that could be provided by Guatemalans who today do not have jobs have to overcome entry barriers at the cost of any earnings, which is unproductive.
Since a Bill on the subject is pending in the Economic Commission of Congress, the plenary is well-informed on the first Double Taxation Treaty that Guatemala would ratify and allow exporting services to Mexico without suffering double taxation. Deputies: let’s work for Guatemala and approve this initiative!
Initially published in AGEXPORT Hoy.
By Rodolfo Salazar
BLP Partner in Guatemala
[email protected]