New Tax Compliance Law Introduces Daily interest Calculation to Benefit Taxpayers
Starting in 2025, teh General Treasury of the Republic (TGR) will implement a notable change to the Tax Compliance Law, also known as the “Anti-Evasion Law.” This modification aims to expedite taxpayer payments by introducing a new method for calculating interest on tax debts. Instead of the previous monthly or fractional-month system, interest will now be calculated daily, ensuring taxpayers pay only for the exact number of days late.
This shift represents a significant benefit for taxpayers. Under the old system, even a single day of delay could result in interest charges for an entire month.Now, as the TGR explains, taxpayers will pay interest “only for the exact number of days late,” avoiding unnecessary financial burdens.
The new interest rate will be based on the current interest rate applicable to operations of one year or more, published by the Commission for the Financial Market (CMF).This rate, adjusted for national currency and capped at the equivalent of 2,000 units of growth, will be increased by 3.5% annually,plus an additional fixed rate (spread) of 3.5%. The annual rate is then divided by 360 to determine the daily interest on the debt.
What Does This Mean for Taxpayers?
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The new system translates into a benefit for taxpayers who comply with their economic obligations diligently. To illustrate, the TGR provided an example:
- Under the previous system, a taxpayer who forgot to pay a $2,000,000 obligation for two months would accumulate $90,000 in interest.
- With the new daily calculation, the interest drops to $27,067, reflecting a significant reduction from 3% to 0.0135% per day for 60 days of delay.
Even if the delay extends to 61 days, the interest under the old system would jump to $120,000 due to the monthly rate increase. However, with the new calculation, the taxpayer would pay only $27,518, based on a daily interest rate of 0.0137%.
Key Comparisons: Old vs. New System
| Aspect | Old System | New System |
|————————–|————————————|————————————|
| Interest Calculation | Monthly or fractional-month basis | Daily basis |
| Interest Rate | 3% for two months, 4.5% for three | 0.0135% per day (approx.) |
| Example: $2M Debt | $90,000 for 60 days | $27,067 for 60 days |
| Example: $2M Debt | $120,000 for 61 days | $27,518 for 61 days |
The TGR encourages taxpayers to visit their website to learn more about the new provisions and take advantage of the available benefits. This change not only promotes fairness but also incentivizes timely compliance, aligning with the broader goals of the anti-Evasion Law.
By adopting this daily interest calculation, the TGR is taking a significant step toward modernizing tax compliance and reducing the financial strain on taxpayers. For more details, visit the TGR website or explore the latest updates from the Commission for the Financial Market (CMF).
New Tax Compliance Law: Expert Insights on the Shift to Daily Interest Calculation
Starting in 2025, the General Treasury of the republic (TGR) will introduce a groundbreaking change to the Tax Compliance Law, also known as the “Anti-Evasion Law.” This reform aims to modernize tax compliance by shifting from a monthly to a daily interest calculation for tax debts. We sat down with Dr. Elena Morales, a leading tax policy expert, to discuss the implications of this change for taxpayers and the broader economy. Dr. Morales provides valuable insights into how this shift promotes fairness, incentivizes timely compliance, and reduces financial burdens on taxpayers.
The Shift to Daily interest Calculation
Senior Editor: Dr.Morales,thank you for joining us. Can you explain the importance of moving from a monthly to a daily interest calculation for tax debts?
Dr. Morales: Absolutely. The shift to a daily interest calculation is a major step forward in modernizing tax compliance. Previously, even a single day of delay could result in interest charges for an entire month, which often felt unfair to taxpayers. Under the new system, interest is calculated based on the exact number of days late, ensuring that taxpayers only pay for the time they are actually overdue. This not only promotes fairness but also encourages timely payments.
Benefits for Taxpayers
Senior Editor: How does this change benefit taxpayers specifically?
Dr. Morales: The benefits are substantial. For example, consider a taxpayer who owes $2 million and is 60 days late. under the old system, they would pay $90,000 in interest. With the new daily calculation, that amount drops to just $27,067. Even if the delay extends to 61 days,the interest increases only slightly to $27,518,compared to $120,000 under the old system. This reduction in financial burden is a clear win for taxpayers who are committed to meeting their obligations.
Aligning with Broader Goals
senior Editor: How does this change align with the broader goals of the Anti-Evasion Law?
Dr. Morales: The Anti-Evasion Law aims to improve compliance and reduce tax evasion. By introducing a daily interest calculation, the TGR is making it easier for taxpayers to meet their obligations without facing excessive penalties. This approach incentivizes timely payments while also reducing the financial strain on those who may struggle with cash flow issues. It’s a balanced strategy that supports both compliance and fairness.
Encouraging Taxpayer Engagement
Senior Editor: The TGR encourages taxpayers to visit their website to learn more about these changes. How important is it for taxpayers to stay informed?
Dr. Morales: It’s crucial. Understanding the new provisions allows taxpayers to take full advantage of the benefits. The TGR’s website provides detailed data on how the daily interest calculation works, along with examples and tools to help taxpayers estimate their obligations. Staying informed empowers taxpayers to make better financial decisions and avoid unnecessary penalties.
Looking Ahead
Senior Editor: What does this change mean for the future of tax compliance?
Dr. Morales: This is a significant step toward a more modern and taxpayer-friendly system. by adopting a daily interest calculation,the TGR is setting a precedent for other jurisdictions to follow. It shows that it’s possible to balance the need for compliance with fairness and clarity. I believe this change will have a positive impact on both taxpayers and the broader economy.
Senior Editor: Thank you,Dr. Morales,for yoru valuable insights. It’s clear that this reform represents a meaningful improvement for taxpayers and the tax system as a whole.
For more details on the new Tax Compliance Law and how it affects you, visit the TGR website or explore updates from the Commission for the Financial market (CMF).
