All Latin America is attractive to foreign investments, not only because it's countries have less costly workforce, but also because of the fact of being limited economies and their lack of infrastructure. It isn't true that foreign investors invest in th e more robust economies of the area just because they are robust.

As an example, we mourn with more than enough reason because only 37 % of guatemalans enjoy electrical service, meanwhile, to a generating utility in the United States that is looking to expand its markets, this gloomy indicator informs them that 70% of t he potential market is unsatisfied because there is nobody who offers it to them. The same can be said of the telecommunications, roads, airports, drinkable water, etc. The only thing that can make this longed capital flow is the establishment of a secure and stable judicial, political and economical framework.

An important element that is high in the list of foreign investors that analyze our markets is the fiscal treatment and the general stability (or instability) of fiscal laws. If we "put ourselves on the shoes" of the foreign investor, we have to deal with two disadvantages from the fiscal point of view in Guatemala.

In a 10 year period, we had three different tax laws, two new laws that were born as hybrids of the Revenues Tax last year (Financial Products Law and the Agricultural and Mercantile Companies Tax), two value added tax laws, two fiscal stamps laws (former Legal Paper), a Tax Code, three vehicle circulation tax laws, two real state tax laws, and one that created the "Extraordinary Tax and Emergency-Treasury Bonds 1991). Not to mention various reforms to those same laws and substantial changes made to them by unconstitutional impugnations resolved by the Constitutional Court.

The only constant in our fiscal system is its instability. Now there are talks of a new extraordinary tax over gross revenues obtained and declared in 1995 and 1996, whose project is called in a political-conciliatory tone "Solidarity, Extraordinary and T emporal Tax and Economic Emergency Treasury Bonds 1996 emission".

These constant changes in fiscal rules for the taxpayers in Guatemala, make the act of tax paying specially intricate for the companies that pay their taxes, as the serious foreign firms do. Also, it restrains the possibility to predict medium and long te rm income yields, because of the uncertainty that any moment a new, more burdensome, tax law can be decreed. So Guatemala needs to stabilize its fiscal legislation in order to attract foreign investors.