Reform of Article 66 Law on Strengthening Revenue
Congreso Nacional
- Decree: 167-2011
- Published: November 11, 2011
- Issuing body: Congreso Nacional
- Gazette: 32,666
- Category: Financial & Tax
Summary
This reform increases the commercial debt limit Honduras can take on from 9% to 350 million dollars, authorizing the Ministry of Finance to obtain loans in the international market to finance government priority projects when external conditions are better than local ones, while respecting commitments with the International Monetary Fund.
Considerations
That through Decree No. 17-2010 dated March 28, 2010, the LAW FOR STRENGTHENING OF REVENUES, SOCIAL EQUITY AND RATIONALIZATION OF PUBLIC SPENDING was approved, in which Article 66 authorized the State Secretariat of the Office of Finance to obtain reimbursable resources in the form of commercial loans (non-concessional) up to nine percent (9%) of the balance of external debt in effect as of December 31, 2009.
That the Republic of Honduras on September 10, 2010, executed the Letter of Intent, Memorandum of Economic and Financial Policy and Technical Memorandum of Understanding with the International Monetary Fund, covering the period October 2010 to March 2012, which establishes in Article No. II Macroeconomic Policy 2010-2011, subsection 4, Fiscal Policy, Budget Financing Section, a limit for contracting debt in Commercial terms (non-concessional) up to an amount of THREE HUNDRED FIFTY MILLION DOLLARS OF THE UNITED STATES OF AMERICA (US$350,000,000.00).
That the ceiling established in Decree No. 17-2010 for the contracting of loans in commercial terms is less than or was approved at a date prior to the execution of the Letter of Intent, Memorandum of Economic and Financial Policy and Technical Memorandum of Understanding, executed with the International Monetary Fund, leaving a gap for the contracting and execution of Investment Programs and Projects that benefit the economic and social development of the country, which are a basic premise of the Plan of the Nation and Vision of Country.
That the contracting of loans in commercial terms approaches the limit established in Decree No. 17-2010 dated March 28, 2010, making it urgently necessary to increase said ceiling.
That the Constitution of the Republic determines in its Article 205 numeral 1), that it is within the competence of the National Congress to create, decree, reform, repeal, and interpret the laws.
Articles
To amend Article 66 of Decree No. 17-2010 dated March 28, 2010, containing the LAW FOR THE STRENGTHENING OF REVENUES, SOCIAL EQUITY AND RATIONALIZATION OF PUBLIC SPENDING, which shall read as follows:
The Secretary of State in the Office of Finance is authorized, when the financial conditions of the internal capital market are not as favorable as those prevailing in the external market, to obtain reimbursable resources up to an amount of THREE HUNDRED FIFTY MILLION DOLLARS OF THE UNITED STATES OF AMERICA (US$350,000,000.00), in such manner as to allow it to cover its budgetary needs or to finance projects or programs that are considered priorities, to execute external contracts as loans under commercial terms as established in the Letter of Intent, Memorandum of Economic and Financial Policy and Technical Memorandum of Understanding with the International Monetary Fund. This includes budgetary support operations to the Central Government and where the Central Bank of Honduras acts as borrower and transfers through subsidiary agreements the resources obtained to the General Treasury of the Republic. Financial conditions must not affect the liquidity and solvency of debt in the short, medium and long term.
This Decree shall enter into force as of the day of its publication in the Official Gazette La Gaceta. Given in the City of Tegucigalpa, municipality of the Central District, in the Session Hall of the National Congress, on the fifth day of the month of October of two thousand eleven. JUAN ORLANDO HERNÁNDEZ ALVARADO PRESIDENT RIGOBERTO CHANG CASTILLO SECRETARY ELISEO NOEL MEJÍA CASTILLO SECRETARY To the Executive Branch. Therefore; Let It Be Executed. Tegucigalpa, M.D.C., October 20, 2011. PORFIRIO LÓBO SOSA PRESIDENT OF THE REPUBLIC THE SECRETARY OF STATE IN THE OFFICE OF FINANCE WILLIAM CHONG WONG
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