A Decade of VAT Reforms in Honduras: A Legislative Fixation on Exemptions

Abstract

In this article, the author examines the evolution of a decade (2013-2023) of VAT reforms in Honduras, focusing on legislative tendencies towards increasing VAT exemptions. This trend is analysed in contrast to the country’s considerable tax expenditures, suggesting a lack of strategic coherence in VAT reform efforts. He also identifies gaps in the VAT system, including the absence of comprehensive regulations for the digital economy, the need for an electronic invoicing framework and inadequate definitions regarding the taxation of services and intangible goods, as well as the issue of tax compliance among businesses in the informal economy, proposing a re-evaluation of the simplified tax regime.