Honduran business leaders warn of economic and labor impact of Tax Justice Law

Various representatives of the Honduran private sector have expressed concern about the possible approval of the Tax Justice Law, an executive initiative currently under legislative discussion which, according to projections, could significantly alter the country’s economic environment. The warnings come at a time of economic slowdown and growing social demands, which have intensified the debate on the role of the state in fiscal matters.

Corporate position regarding the government proposal

The suggested legislation, defended by the government as a way to remove tax advantages and promote tax fairness, has faced significant criticism from the Honduran Council of Private Enterprise (COHEP) and other productivity sectors. They argue that the proposal would have a direct impact on private investments, formal jobs, and living expenses within the nation.

A representative from COHEP highlighted that, should the law be passed, it might generate a discouraging atmosphere for investors, resulting in a series of outcomes like widespread job losses, rising prices, and businesses moving to countries with more consistent regulations. The objections are centered largely on the removal of tax benefits, which, according to industry executives, have been essential for the expansion of areas like free trade zones, agriculture-related businesses, and industrial production.

Anticipated effects on employment, prices, and competitiveness

The corporate world pinpointed three primary impacts that, in their view, enacting this legislation could cause:

1. Reduction in formal employment: companies currently operating under special exemption regimes would be forced to cut staff or close operations in the face of increased costs. The most vulnerable economic areas would be those oriented toward exports and those located outside the main urban centers.
2. Increase in the cost of living: According to private projections, the change in the tax structure would lead to higher prices for essential products such as food, medicine, transportation, and basic services. This would especially affect lower-income sectors, as the new costs would be passed on to the end consumer.
3. Displacement of capital and talent: Another point of concern is the possible flight of companies and investments to neighboring countries with regulatory frameworks considered more stable. This trend, they warn, would compromise economic development in the medium and long term, as well as causing a significant loss of skilled jobs.

Calls for discussion and examination of laws

Under this situation, different business sectors requested that the National Congress pause the process of approving the law until spaces for technical and participatory discussions were opened. Representatives from the private sector mentioned that tax reform needs wide agreement and an evaluation of its effects, especially in an economic setting characterized by significant informality and minimal tax revenue.

They also called on citizens to inform themselves about the content of the proposal and to demand that fiscal decisions not affect sources of employment or national competitiveness. “What is at stake is not a privilege, it is the livelihood of thousands of families,” said a business representative.

Institutional tensions and fiscal challenges

The debate surrounding the Tax Justice Law is taking place in a context of tension between the government and organized economic sectors, reflecting a fundamental dispute over the development model the country should follow. While the executive branch argues for the need to revise tax regimes to reduce inequality and increase state revenues, the private sector warns of the effects of reform without technical consensus or guarantees of legal certainty.

This installment brings attention to the difficulties that Honduras encounters in aligning its fiscal fairness goals with the necessity to uphold conditions favorable for investment, formal jobs, and economic steadiness. In a setting characterized by institutional doubt and political division, the discussion regarding this legislation emphasizes the pressing need to develop pathways for consultation and enduring social discourse.