The Tax Justice Law in Honduras: Balance is Key

By Blanca Mejia, Associate at Bufete Mejia & Asociados

The main objective of the new Tax Law is, in theory, to improve the tax system and increase state revenues to finance social programs and infrastructure projects. However, businessmen argue that the scheme proposed by the new body of law could have negative consequences for the business sector and, ultimately, for the Honduran economy in general.

One of the main concerns is the increase in the tax burden on companies, which does not arise directly, but implicitly through the repeal of different legal figures whose purpose was to provide tax relief and promote foreign investment through direct participation or under collaboration schemes as business partners.

On the other hand, proponents of the Tax Law argue that its implementation is necessary to address economic inequality in Honduras and ensure a more equitable distribution of resources. They point out that, historically, there has been a significant gap between the rich and poor sectors of Honduran society, and that this law seeks to correct those disparities through increased tax collection from better-off sectors. Furthermore, they argue that the additional resources generated through these taxes could be used to improve public services, such as education, health, and infrastructure, which would benefit the population in general. All under the premise that a more progressive tax system is essential to strengthen the social and economic stability of the country in the medium and long term.

As citizens, it is crucial to evaluate this situation with a balanced and objective vision. While it is true that tax collection can be a useful and valuable tool for financing development and reducing inequality, it is also essential to take into account the effects that these abrupt changes can have on the business sector and, therefore, on employment, the economy, and the social development of the different sectors of the country.