- Elgar original reference
Edited by Richard M. Bird and Enid Slack
Chapter 28: Property Taxes in Nicaragua
28 Property taxes in Nicaragua1 Richard M. Bird Nicaragua, like its neighbors in Central America, is essentially an agricultural country with a small manufacturing sector. Its political history in recent decades has been somewhat unusual, with a long-established (Somoza) dictatorship being overthrown in the 1970s by a left-wing (Sandinista) government, which in its turn was replaced in 1990 by a more centrist regime, which has since weathered three democratic elections. One legacy of this history is that Nicaragua’s tax ratio is relatively high for the region – 23.9 percent of GDP in 1995–99 compared to a regional average of 16.5 percent, for example. Moreover, Nicaragua is unusual in Central America in that its local taxes are also relatively high – over 2 percent of GDP in 1995, compared to as little as 0.2 percent in some of the neighboring countries such as Guatemala and El Salvador. Local taxes accounted for 17.4 percent of total government revenues in 1995. There are 151 municipalities in Nicaragua. There is no intermediate level of government. Most municipalities are small, rural and poor. Local taxation is dominated by the capital, Managua, which accounts for 53 percent of all local revenues. Mayors and councils are elected for a fouryear period. Municipal taxes are governed by a national law (Plan de Arbitrios, Decree 455 of 1989 for other municipalities and Decree 10-91 for Managua). Despite the relative importance of local revenues in general, property taxes are less important in Nicaragua than in any other country in the region,...
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