Last weeks article in La Prensa about the flat tax being considered by Presidential front runner Martinelli was received with mixed reviews. Some economists believe that there will be reduced income to the state and are therefore against it. Others point out the simplicity of filing and increased foreign investment will more than make up for any shortfall because of volume. These are the same arguments used everywhere that the Flat tax is proposed. The fact is that the more than 25 small countries that have implemented a flat tax have fared much better than those who have not, even in a poor economy. Take a look at this video produced by the Freedom and Prosperity foundation on the issue.
Excerpts from La Prensa; The tax reform proposed by the Alliance for Change political party, which includes implementing a flat tax instead of the current income tax has generated an interesting debate among economists, lawyers and experts in tax law.
Some support the initiative, arguing that the proposal simplifies the current system and will attract investment into the country, but others warn that the change will decrease revenues.
The flat tax proposed by the presidential candidate Ricardo Martinelli, who currently leads polls by a wide margin, involves reducing the rate of corporate income tax from 30 percent to between 10 percent and 15 percent while limiting deductions and eliminating a number of grants and tax exemptions, including banking.
Recent Comments