San José, Costa Rica, since 1956

Guatemala Seeks Taxes To Cover Storm Damage

Guatemalan President Alvaro Colom announced Sunday, June 13 that he would promote a “strong” tax reform 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 the new measure would increase the nation’s tax burden by 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 needed to rebuild the country’s infrastructure that was destroyed by the storm, Colom indicated that it would be more than $250 million.

In its wake, Agatha left 74 dead and over a hundred people missing. The storm destroyed 20 major and almost a hundred secondary bridges, and damaged close to 500 schools and dozens of roads and aqueducts.


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