Country report Honduras

Economic overview

On January 27, Xiomara Castro assumed the post of president of Honduras. His speech was vibrant, in which he made it clear that he was receiving a bankrupt, looted country, with a debt that amounted to over 20 billion dollars, and with a clientelist structure practically intact of corruption and impunity, which in the last 12 years it had gradually infiltrated public and private spaces.

A people destroyed by poverty – almost 74% of the population and with 50% in absolute misery – and by desperation. An increasing number of people looking north, not so much attracted by the “American dream”, but rather fleeing from misery, violence and lack of opportunity.

A people who, despite everything, in November last year decided to go and vote en masse to punish the heirs and followers of the coup, the white-collar butchers, the thieves and corrupt people who had put the country up for sale, its lands better, the common goods, sovereignty and dignity of the nation itself.

A vote also for change, for the hope that a different Honduras is still possible. A vote for the woman who mobilized together with her people against the breaking of the constitutional order, the collapse of democracy, against bullets and batons, soldiers and policemen, denouncing illegal detentions, physical and psychological repression, forced disappearances, torture and assassinations.

The expectations of a wounded people, disappointed by politics and traditional politicians are very high. Nourish the promises of Xiomara Castro.

In May, almost four months after taking office, the president made an initial assessment of the things done, the difficulties faced, the challenges and future goals.

“With responsibility I accepted the challenge of running Honduras, a country subjected to a violent and corrupt narcodictory, which has entrusted all the control of the state to the oligarchy, in exchange for its complicit silence, in the face of the dismantling of our homeland” .

“We have prevented the darkest forces and the most conservative and extremist sectors of Honduras, who wanted to deal a deadly blow to us immediately by taking control of Congress, but they failed. And this thanks to the popular mobilization that accompanied me in defending what we have gained with an overwhelming majority at the polls, ”Castro said in his speech with united networks.

Main sectors of industry

The country’s economy revolves almost exclusively around agriculture, so much so that for some years the government has been promoting various projects for the development of the agricultural sector and the industrial sector connected to it. In this context, efforts are being made to strengthen the hydroelectric network but also the diversification of agricultural crops.

The agricultural sector contributes about 13.5% to the GDP, not bad for a territory that winds to agriculture for only 9.5%; the main crops are coffee, bananas, sugar cane, oil palm, pineapple, citrus fruits, corn, rice and various legumes (among the most important beans).

One of the most important economic resources together with agriculture is forestry: exploitation in the past was lacking also due to the very few communication routes and scarce investments in it. It is an important sector especially for the production of timber, including pine, mahogany, ebony and walnut … fishing and shellfish farming are also very flourishing in the forest areas. Despite the fortune of this sector, excessive exploitation could in the long run lead to unpleasant ecological consequences for Honduras: today we are working to ensure that sustainable development of the sector is implemented.

Economically speaking, since the discovery of Honduras in 1500, the cornerstone has always been that of mineral resources. The most important are those of silver, zinc and lead … other minor deposits are those of copper, coal, iron and antimony. In addition to the mining industry in Honduras, the textile industry is very lucky, providing as much as 30% of the country’s annual GDP. The major industrial compartments wind their way around the capital, but also towards San Pedro Sula and in the vicinity of Puerto Cortes.

Despite the economic power of the primary and secondary sectors, the tertiary sector also plays its part. Commercial and finance projects are being developed mainly thanks to the development of banks, including the Municipal Bank and the National Bank.

Taxation for businesses in Honduras

The Honduran tax system is structured on two main types of taxes according to their recipient: taxes that are paid centrally and those destined to municipalities. Among the central taxes, the main ones are: income tax for individuals and legal entities and sales tax. As for municipal taxes, we have real estate tax, tax on personal income and tax on industry, trade and services.

For legal persons, net income is determined by deducting from the gross income the ordinary and duly substantiated costs necessary for the production of such income. Losses suffered during the year may, subject to authorization by the tax authority, be carried forward for the following three years, deducting any income. However, this possibility is limited by the fact that it is not possible to deduct more than 50% of the amount of the net taxable income. Furthermore, for the taxpayer who carries out several activities, the deduction can be made only with regard to profits produced by the same activity that made the relative loss.

The tax is calculated by applying a rate of 25% on taxable income. To this is added a solidarity contribution of 5% for amounts exceeding one million lempiras. Resident taxpayers with revenues exceeding 10 million lempiras must pay a minimum tax equal to the greater of the ordinary tax and 1.5% of revenues. This rate is reduced to 0.75% for some types of companies. Equally subject to a minimum tax are non-residents who carry out transport activities for which there is no minimum threshold and the rate is increased to 3% of revenues.

In order to combat tax evasion, it is also expected that taxpayers who have revenues exceeding one hundred million lempiras and have declared losses for two consecutive years for two in the last five years will have to pay an advance of income tax equal to 1% of the declared revenues. This advance can be used as a credit for the purposes of income tax, temporary solidarity contribution or tax on net assets.

Investing in Honduras

The Government of Honduras has put in place an ambitious policy to attract investors through a series of laws that guarantee investment and earnings.

Pilot center of this winning formula is San Pedro Sula, the industrial capital of the country located on the north coast.

No other city in Central America offers the same potential for investment in industry as San Pedro Sula, and no other city has such excellent infrastructure.

20 private industrial parks are located on the north coast of the country, while only one is located in the south (Tegucigalpa) to contribute to the growth of the area and to test new workforce.

Tegucigalpa, despite being the capital and the largest city of Honduras, has invested less than San Pedro Sula in the industrial landscape but offers the same skilled workforce, moreover it can count on a temperate climate that well influences productivity performance and proximity to offices and infrastructure is certainly another advantage.

The coasts of Valle and Choluteca, places with enormous potential for agro-industrial development.

The Pacific coast of Honduras has excellent conditions for shrimp farming and boasts the largest industries in the sector in the country. The area is also renowned for the cultivation of melons and tropical fruit and vegetables which are successfully exported.

The industries located in the central area and on the south coast, enjoy an efficient motorway network that facilitates transport and access to Puerto Cortes and San Lorenzo, the main ports of Honduras.

Tourism that is growing strongly.

The spectacular beaches that coexist with immense rainforests make Honduras unique in the world and an essential destination for divers and rafting enthusiasts who can navigate rushing rivers.

Honduras, officially Republic of Honduras, Spanish República de Honduras, country of Central America situated between Guatemala and El Salvador to the west and Nicaragua to the south and east. 

Leave a Reply

Your email address will not be published. Required fields are marked *

1 × 3 =