On 4 December 2018, the Public Finance Enhancement Law, Law No. 9635, was approved, which establishes some measures to treat the fiscal deficit, which in recent years has been growing steadily and threatening an economic crisis in the short term.
The Law is composed of four bills that can be summarised as follows:
- Transformation of the general sales tax to a value-added tax (VAT).
- Reform of the Income Tax Law to subject capital gains to a special rate, among other changes.
- Reforms to public employment that seek to grant order and social justice.
- The introduction of a fiscal rule, which seeks to establish a limit to the growth of the budget, depending on the level of indebtedness of the Central Government.
This tax bill became enforceable as of 1 July 2019.