Guatemalan President seeks tax hike to pay for storm damage

June 11, 2010

 

The president of Guatemala, Alvaro Colom, announced Sunday that he will seek a “strong” tax reform in order to obtain the resources necessary to finance the country’s reconstruction after the destruction caused by tropical storm Agatha.
 
The leader told local news sources that the tax reform, which is being developed by the Finance Ministry and which will be presented shortly to the legislature, will be “much stronger” than the “reformita” that his government has pushed without success since last year.

Colom did not indicate whether the proposal will include the creation of new taxes or an increase in the rates of existing taxes, but he assured listeners that with the new measure the nation’s tax burden would increase between 1.5 and 1.9 percent of the country’s gross domestic product (GDP).

The president emphasized that Guatemalans are responsible for the reconstruction of their country, and ruled out seeking international aid for this purpose.

“I´m not going to go out and ask for money as long as we continue collecting a miserable 9.8 percent (of GDP) in taxes, which is an embarrassment,” Colom said.
Although the government hasn’t defined the amount that will be needed to rebuild the country’s infrastructure destroyed by the storm, Colom indicated that it would be more than $250 million.
In its wake, Agatha left a toll of 174 killed and over a hundred missing, as well as the destruction of 20 major and almost a hundred secondary bridges, as well as damage to close to 500 schools and dozens of roads and aqueducts. 
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