Corruption scheme denounced for multimillion-dollar tax evasion

Guatemala’s Tax Administration Superintendency announced on Wednesday a complaint for tax evasion for just over 39 million dollars, originating from 410 companies that provided goods and services to the government of former President Alejandro Giammattei.

The complaint was filed by Superintendent Marco Livio Díaz, who explained that during the years 2021 and 2023, some 410 companies billed the Guatemalan state some 5.73 billion quetzales, equivalent to some 750 million dollars, supposedly in exchange for goods and services, of which the companies paid only a small percentage of taxes and evaded just over 39 million dollars.

The complaint will direct the prosecutor to investigate whether, in addition to tax fraud (value added tax (VAT) and income tax were not paid), there are irregularities with the goods and services, whether they really existed or not.

The scheme, Díaz said, operated with large and small companies, which allegedly sold products to the State directly or through other companies. Among the goods and services that were allegedly sold were food, office equipment and machinery rentals, among others.

The official agreed to name the small companies but refused to name the large companies, which include construction companies, arguing that he was under a legal obligation, since the largest companies were the ones that billed the State the most. The billing amount of the largest companies is estimated to reach 563 million dollars.

The small companies, the complaint says, had no infrastructure or employees, so it is not known whether the contracted products or services were actually delivered. Several of these companies reported having their headquarters in impoverished and dangerous areas of the country, which were monitored and guarded by private individuals, which made it almost impossible to get close to them and put the superintendency’s investigators at risk, Díaz explained.

The case was named B410. The B stands for Bank, because many of the small companies reported having headquarters in Housing Bank colonies, and the number represents the number of companies investigated.

The official also said that all the companies had the same legal representative, a partner based in Belize and an accountant. At least 75% of the companies were incorporated by the same lawyer, who was denounced. His name was not disclosed.

Díaz said that complaints were filed with a court, with the Public Prosecutor’s Office, with the Comptroller General’s Office and with the Attorney General’s Office. He also added that the companies were deactivated from the system so that they cannot continue operating.

“I call on business chambers… the organized business sector, civil society, intellectual and religious elites and think tanks to publicly condemn this case. We cannot build a country under these conditions, where cheating and theft privilege contracts,” concluded Díaz.

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