HomeNewsBriefEl Salvador Proposed Security Tax Stirs Controversy
BRIEF

El Salvador Proposed Security Tax Stirs Controversy

EL SALVADOR / 22 JUN 2015 BY SAM TABORY EN

The controversy over a new, proposed security tax highlights the deep divides over what path El Salvador should take in its ongoing fight against organized crime.

Treasury Minister Carlos Caceres and Justice Minister Benito Lara have both said that the government is preparing a proposal for a new security tax, reported ElSalvador.com. President Sanchez Ceren's communications secretary also called for the new tax in a statement released June 18, stating that El Salvador cannot rely on loans and international assistance to fund security reform.

The remarks follow a recent ruling by El Salvador's Supreme Court, which prevents the government from issuing bonds needed to borrow US$900 million. Some $96 million of these blocked funds would have been used for security programs.  

Officials haven't provided details on how much money the proposed tax would be expected to raise, nor what specific programs might be implemented with the increased funding. Lara said the tax would create a pool of funds dedicated to ongoing security reforms, similarly to how an existing tax on all gasoline sales goes into the country's road maintenance and infrastructure fund. 

Regionally, El Salvador is slightly above average in terms of tax collected as a percent of GDP, according to World Bank data. Across Central America, the average tax rate is 13.7 percent and El Salvador comes in at 14.5 percent, ahead of Guatemala (10.8 percent) and Costa Rica (13.6 percent), but slightly behind Honduras (14.7 percent) and Nicaragua (14.8 percent).

InSight Crime Analysis

Unsurprisingly, this proposal has sparked controversy in El Salvador, with business leaders arguing that what the government needs is a better plan for fighting insecurity, rather than a new tax. "We think that the resources are there, but they aren't being used adequately," one business leader told La Prensa Grafica

The president has said that one of the core initiatives of his government, the National Council for Citizen Security (a security body made up of civilian and government representatives) will decide whether the tax is necessary.

SEE ALSO:  El Salvador News and Profiles

While more funding would certainly help authorities combat historic levels of violence, the government hasn't yet made a strong enough case for how such funding would actually be put to use. Another issue is whether the tax funds would be applied towards the more hardline and militarized approach pursued as of late, or if the government would make good on promises to implement more preventative security reforms.

Other countries in Central America have debated creating new taxes to fund security reform, with some success. Honduras did just that in 2011, passing a law that established a new taxation system. In 2014, Honduras collected some 1.9 billion lempiras (about US$86 million) via this security tax, double the amount collected in 2012 and 2013, according to El Heraldo

share icon icon icon

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

What are your thoughts? Click here to send InSight Crime your comments.

We encourage readers to copy and distribute our work for non-commercial purposes, with attribution to InSight Crime in the byline and links to the original at both the top and bottom of the article. Check the Creative Commons website for more details of how to share our work, and please send us an email if you use an article.

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

Related Content

BELIZE / 28 SEP 2011

This report outlines a series of actions by the U.S. government in order to face violence in Central America.

MEXICO / 7 MAY 2014

Mexico's President Enrique Peña Nieto has made turning the page on the violence of the past administration one of…

EL SALVADOR / 29 JUN 2011

News that El Salvador police may have masterminded the 2009 murder of a top DEA informant is a sign of…

About InSight Crime

THE ORGANIZATION

Venezuela Drug Trafficking Investigation and InDepth Gender Coverage

29 APR 2022

On May 4, InSight Crime will be publishing The Cocaine Revolution in Venezuela, a groundbreaking investigation into how the Venezuelan government regulates the cocaine trade in the country. An accompanying event,…

THE ORGANIZATION

InDepth Coverage of Juan Orlando Hernández

22 APR 2022

Ever since Juan Orlando Hernández was elected president of Honduras in 2014, InSight Crime has provided coverage of every twist and turn during his rollercoaster time in office, amid growing…

THE ORGANIZATION

Venezuela's Cocaine Revolution

15 APR 2022

On May 4th, InSight Crime will publish a groundbreaking investigation on drug trafficking in Venezuela. A product of three years of field research across the country, the study uncovers cocaine production in…

LA ORGANIZACIÓN

Widespread Coverage of InSight Crime MS13 Investigation

8 APR 2022

In a joint investigation with La Prensa Gráfica, InSight Crime recently revealed that four of the MS13’s foremost leaders had been quietly released from…

THE ORGANIZATION

Informing US State Department and European Union

1 APR 2022

InSight Crime Co-director McDermott briefed the US State Department and other international players on the presence of Colombian guerrillas in Venezuela and the implication this has for both nations.  McDermott…