Luisa María Yax Valle
The Law on strengthening fiscal transparency and governance of the Tax Administration Superintendence (SAT by its Spanish acronym) was enacted on July 19, 2016 with 107 votes. It regulates bank secrecy in Guatemala and gives SAT the authority to review companies’ and private individuals’ fiscal periods. It also amends the election of the superintendent, who will henceforth be elected through a competitive examination, as well as the organic laws of SAT, of banks and financial groups, of the National Register of Persons and the Tax and Commercial Codes.
Mr. Ramón Parellada was interviewed on Wednesday, November 2 regarding the above-mentioned law, addressing a few specific points to obtain more details and to discuss the role the United States played in its adoption.
The first question was regarding the intentions that led the members of Congress to adopt the law. Mr. Parellada answered that the law and its adoption were unnecessary. What should be done, in his view, is to simplify the tax system so people pay more taxes, and reduce the size of the informal economy in the country. To solve the problem of tax evasion, controls should not be tightened, but rather tax rates should be lowered. If one of the motivations for approving the law was to reduce illegal activities such as drug trafficking and/or money laundering, which entail cash transfers abroad, this will only happen in the case of drug trafficking when drug production and consumption are no longer penalized in the country, according to Parellada.
The interviewee was next asked what are and will be the side effects of the adoption of the law in Guatemala. Parellada mentioned that Guatemala will become a “tax hell” rather than a tax haven, as argued by those who were in favor of this law. It will be a tax hell where SAT officials will have access to the bank accounts of individuals and companies. This may now be done with their prior consent, following due process and with a court order. After the law goes into effect it will be available to those who might use it to blackmail. Criminals and other persons may misuse this information, which should and must be confidential and private. Moreover, Parellada underscores that this law should not have been adopted, since its consequences for Guatemala are for the most part negative.
Finally, the interviewee was asked regarding the role played by other countries in the hemisphere and Europe, especially underscoring interference by the United States of America for adoption of this law. What other countries say should not
affect decisions taken in ours; the principles they and we so heartily defend should be respected, states Mr. Parellada in that regard. The United States exerted a lot of pressure on this decision; there were different ways in which this pressure was exerted: threats of discontinuing support and blackmail of sorts on the part of that North American country. It is a shame that a country like the U.S.A. interferes on the subject of transparency and fiscal enhancement, when it is one of the countries with most fiscal terrorism in the world. It is not a good example of a free society, since on multiple occasions it has attacked the sovereignty of countries like Guatemala; it has attacked individual freedom, states Mr. Parellada. However, he states that the pressure did not come only from the United States; there was also international pressure in general.
The interview ended by stressing the lack of trust and negative and immediate effects adoption of this law has and will have on Guatemala, by undermining financial institutions and jeopardizing the banking system, which would collapse due to the lack of trust. If somebody feels that his privacy is being systematically violated because of the fact of having a bank account, he would close his savings and checking accounts. Bank secrecy has been and still is the basis for banking activity. Therefore, bank secrecy should not have been eliminated, stresses Mr. Parellada.