Factory Law Robs Guatemala Millions
The Guatemalan government stops receiving as of Monday about $400 million per year, due to an obsolete law still in force that give extraordinary tax benefits to assembly plants.

The rule was decreed in the late 1980's, when Central American countries were fighting for the installment of these industries, most of them from South Korean and Taiwanese capital.

With the pretext of attracting direct foreign investments, they granted tax exoneration, which is now considered detrimental to national interests.

These companies enter machinery, raw materials and input necessary for functioning, exports its production, and leave as a single benefit the temporary contract of Guatemalan labor.

The 29-89 decree exempts them from paying import and export taxes, 10 years free of profit taxes and grants them a flexible labor regime.

Although there are over 700 of these factories, only three of them have labor unions.

Recently, the Maquila Coordinating Institution has denounced a group of labor violations of thousands of women, stating authorities' indifference in that issue.

According to Jonathan Menkos, from the Central American Institute on Tax Studies, the law does not include other factors to attract direct foreign investment, like qualified labor, political stability and a solid State, with less corruption.