HomeNewsBriefNicaragua Govt Rejects Security Tax
BRIEF

Nicaragua Govt Rejects Security Tax

DRUG POLICY / 4 AUG 2011 BY JEN SOKATCH EN

Nicaragua’s Finance Ministry refuses to raise taxes on businesses to increase funding for security initiatives.

Finance Minister Alberto Guevara admitted that more funds are needed to fight organized crime in the country, but said that because Nicaragua’s tax burden is one of the highest in the region, raising taxes on business is not an option.

As La Prensa Grafica reports, a recent study found that the tax burden on Nicaragua’s businesses, at 63.2 percent of pre-tax profits, is the highest in the region.

Other countries in Central America, such as Costa Rica, El Salvador and Honduras, are moving forward with plans to levy new taxes to fund security initiatives. The region has set out a joint anti-crime strategy which is set to cost $953 million.

The idea of security taxes has been met with resistance from business representatives. The Federation of Central American Chambers of Commerce (FECAMCO), for example, recently came out against the idea, saying that governments should instead take such measures as combating corruption. Guevara echoed this idea, saying that the government in Nicaragua should work toward improving the efficiency of the system, instead of further burdening the country with taxes.

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