Tax Reform

A proposal before Congress would raise from 150,000 to 300,000 lempiras (about $6,000 to $12,000) the transaction ceiling up to which individuals pay the 2-lempira-per-thousand Security Tax on personal bank accounts, extending the standard rate to a broader range of transactions.

A bill by Congressman Juan Carlos Lagos would double the security-tax threshold for personal savings-account transactions from about 150,000 lempiras (roughly $6,000) to 300,000 lempiras (roughly $12,000), expanding the range subject to the lower two-lempira-per-thousand rate to benefit more Hondurans, the lawmaker says.

Dante Mossi, former president of the Central American Bank for Economic Integration, criticized a proposed reform excluding bonuses from income-tax calculations, warning it could enable employers to reclassify wages as tax-free bonuses and erode government revenue.

Former Central American Bank president Dante Mossi cautioned that a proposed reform to exclude bonuses from income tax (ISR) calculations would create tax-evasion opportunities and reduce government revenue, reversing two decades of IMF-backed reforms.

Congress is considering a reform to exclude performance bonuses, gratuities, and overtime pay from income-tax calculations, a move an economist says would reward worker effort but warns could enable tax evasion without proper state oversight.