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Guatemala receives $340m for public spending reforms

By Judith Ugwumadu | 19 June 2014

The World Bank has approved a 25-year $340m loan to help Guatemala improve the effectiveness and efficiency of public spending and to reinforce the country’s tax policy.

Specifically, the loan will help support government actions to increase the amount of income tax raised as a proportion of Guatemala’s gross domestic product from 2.7% to 3.2%.

It will also help increase the percentage of children under one year old who receive health and nutrition services in 83 vulnerable municipalities. And funds will be used to improve the implementation of social programmes by including 80% of all beneficiaries in a Unique Beneficiary Registry, the bank said.

Dorval Carias, Guatemala’s finance minister, commented: ‘The government of Guatemala is highly committed to the promotion and implementation of the necessary measures to achieve higher sustainable economic growth, increased productive investment, prioritised in the areas of health and social protection, as well as to strengthening efficiency in public spending management.’

The development policy loan also provides support to the government’s plans to increase the number of effective tax payers by at least 10% and have signed frameworks to exchange tax-related information with 60 countries.

Oscar Avalle, World Bank country manager for Guatemala, added: ‘The 2012 tax reform, along with an effort to increase efficiency in public spending, will allow Guatemala to have more resources to assist the poorest and most vulnerable population. The increased availability of funds will result in more opportunities for all.’



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