Honduras Director of the DEI (Tax Authority) Called for Congressional Hearings Over Hundreds of Business Closures

The conflict between employers and the Executive Directorate of income (DEI) published a statement about the hundreds of business closures throughout the country including the main revenue generators such as Tegucigalpa, San Pedro SUla and Roatan. By the end of the day yesterday displeasure in Congress had reached a level so that she has now officially been called to appear for Congressional hearings to better explain the recent actions of the DEI.

DEI-Honduras-Tax-Collection-Agency

Tax Collection in Honduras Continues to grow while the poor and middle class continue to suffer from all the new taxes that have been passed on to the consumer.

Gabriela Núñez, Member of the legislative budget Commission, announced that they will review the reforms to the new tax code, but before they will hold hearings with the Minister Miriam Guzman on several issues.

Núñez explained that in September congress introduced an initiative so that the status of the national tax register (RTN) cannot can be used to block economic activity of the country. (Similar to the USA Federal ID number used by businesses and the Social Security number used by individuals.

Also, another proposal in congress currently underway aims to make the calculation of income tax reflect a five-year inflation rate from 2010 to 2014 and 2014 an not only for 2014, as it is currently being implemented by the DEI.

She added that another point of contention relates to the law of prices of transfers, which through the regulation incorporates other obligations or areas of application that are not in the current law.

“The recommendation of the President of the Congress is to invite to her (Miriam Guzmán) to the finance and Budget Committee to discuss these issues before any other action is taken. There are many points that concern us in reference to the macroeconomic,”she expressed.

On that order, she acknowledged that the procedures of the DEI to the close of business have not been correct and before any change in the tax administration is made it requires a complete study and possibly will promote further modifications.

The Business Closures by the DEI

170 Businesses closed

10 million lempiras in lost taxable base in Roatan alone

20 million lempiras is expected to be collected from the fines applied in Roatan alone

Discomfort

The private sector continued yesterday, objecting to the actions of the DEI by closing without warning or notice businesses in different cities of the country.

Also, through a public communication issued by entrepreneurs and business leaders and owners, they have demanded that the country guarantee free enterprise and as such encourage more freedoms of consumption, investment, trade and industry.

They accuse the DEI of acting contrary to the discourse promoted by the Government to attract investment to the country; plus they added that the actions taken by the DEI by blocking of the RTN, have resulted in painful delays in customs, there is a lack of administrative simplification and a very deficient tax system, noted the document.

Jimmy Daccarett, President of the National Association of industrialists (Andi), said that the most affected with the decisions of the DEI are the small and medium-sized Honduran companies.

They must understand that tax laws should be amended. “What we want is a tax simplification, and it is not correct that the DEI just walk in and close business for minor issues”, he said. Similarly, Pedro Barquero, director of the Chamber of Commerce and industry of Cortés (CCIC) reaffirmed yesterday after a meeting with all employers, that the business sector is in complete accord and unified against the actions of the Government by not helping to stop the actions and the DEI for taking such drastic measures.

To that extent, he said that they are available to those affected by closures with assistance to legal advisors in the different chambers of Commerce to get business back into operation.

At the same time he informed that they are offering more services to assist business owners in order to train the corporate sector regarding billing requirements.

What we are seeing is that the business community is nervous, there is stress and concern and we believe that that is not favorable to generate business and jobs. We must give confidence”, he urged.

Sanctions Imposed by the DEI

Ángela Madrid, general manager of the DEI, offered a report yesterday regarding irregular invoices from businesses that were closed by the entity, claiming that these documents did not meet the requirements.

“In the establishments we visited the tax documentation (mostly receipts) was not authorized by the DEI, therefore cannot be ignored the the law,” she said.

She denounced that several large businesses in the Capital city of Tegucigalpa and other sectors of Northern part of the country deliver a pre-invoice, which is not an authorized document and breaks the new electronic billing system.

In addition, she explained that if bills do not have the necessary requirements, the DEI can monitor authorized printers, and if they are not issuing the correct document its operations will be suspended.

For the case, they are already in process of suspension of two printers and five in research. Regarding the discomfort expressed by employers that agents of the DEI come armed and with security agents, Madrid justified that it is to protect the integrity of the DEI employees by the threats they have received.

She added that they will be publishing a video that was recorded in Utila, where “our colleagues were threatened with death and that is well documented and can be seen in this video; In addition, that person had the audacity to go on social media and repeat the threats etc. for which they have a screenshot”.

She announced that they are preparing a formal complaint against the taxpayer who threatened the DEI employees.

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