Tax and Minimum Wage Tension in Nicaragua

In Nicaragua, there is uncertainty because the government is reviewing the tax reform without the participation of businessmen, and because adjustments to the minimum wage could be made in September.

Weeks ago, it was reported that when the government’s review of the tax reform in force in the country since February is completed, businessmen consider that no tax cuts will be made, despite the fact that production costs in the country have risen considerably.

At that time, Jose Adan Aguerri, president of the Superior Council of Private Enterprise, said that the private sector was not invited to participate in the review process of the tax reform.

The position of the business sector remains motionless, as Michael Healy, president of the Union of Agricultural Producers of Nicaragua (Upanic), explained to Laprensa.com.ni that “… the position that should be repealed the tax reform and reduce public spending, because otherwise the economy will continue to decline.”

Another situation of concern for employers is a possible adjustment to the minimum wage, given that the current wage table expires in August.

Sergio Maltez, president of the Nicaraguan Chamber of Industries, said that “… it is necessary to analyze the situation well, whether or not to make an adjustment to the minimum wage. It is important to analyze properly, because if ultimately you are going to increase the salary to throw many people into unemployment, I think it is not appropriate, we in this time what we have done is to take care of the current job as far as possible.”