Nicaragua finally publishes tax law

New tax law finally gets published in La Gaceta—two weeks after entering into force. But a leading tax expert says the new law remains a big confusing mystery

(published Jan. 17, 4:30 p.m.)- Fifty-one percent of Nicaraguans admit they don’t know enough about the so-called “Tax Concertation Law” to offer any opinion on the new legislation, which entered into force on Jan. 1.

 Those are the folks who are being honest.

The rest of the country claims it is split on the new law, 35% in favor and 14% against, according to an M&R Consultants poll released this week. But don’t ask anyone to defend their position with much thought, because chances are no one has any idea what the law actually says.

That’s because Law 822, or the Tax Concertation Law, was only just published today, Jan. 17—a full two weeks after it went on the books as the law of the land. If that doesn’t seem to make sense, you’re starting to understand the problem.

Normally, laws don’t enter into force in Nicaragua until they are first published in the official daily register, La Gaceta. But in the Sandinistas’ rush to pass the Tax Concertation Law, they tagged on a pushy little article reading, “This law will enter into force on January 1, 2013, regardless of whether it gets printed before then in the official daily La Gaceta.”

Thanks, I’ll get right on that

In the end, it turns out it took the government a full 17 days to finally get around to printing the law that was supposedly already on the books. Now tax officials from the DGI, helpful as always, are informing local businesses they have some reading to catch up on.

“The General Tax Office, with the purpose of maintaining our tax contributors informed, takes advantage of this opportunity to send you the text of Law 822, or the Tax Concertion Law. Also, we wish you success in 2013,” reads a cheerful email sent out today by the DGI, attached with a hefty 241-page text of the new law for bathroom perusal.

“The law was published in La Gaceta, but it remains in the darkness and there is still a lot of doubt about it for several reasons,” says tax expert Julio Francisco Báez. “First of all, the law has not been explained or divulgated to the public; it’s practically a secret.”

Though publishing the law today was a first step, Báez says, the tax legislation still hasn’t been regulated so there is no clear way to enforce it. Further complicating the situation, Báez argues, is that fact that the old Law of Fiscal Equality officially died on Dec. 31, 2012, before the new “Tax Concertation Law” was fully born.

“Quite simply, we are in a judicial limbo on this issue and many others at the moment,” he said.