LAW AND BUSINESSGuatemala's resources are limited. Thus, it is pretentious to argue that if the State's resources were properly channeled to promote law enforcement, without simplyfing the legal system, the informal market would be eradicated.
Based on this false understanding of the problem, politicians argue that the State needs more taxes to count with the necessary resources for law enforcement. Furthermore, they say the government cannot solve the nation's problems because tax laws are not obeyed and taxes are not paid. However, it is incoherent to suggest that informal economy will end by rasising taxes.
Informal economy is the symptom of a chronic ailment inherent in the juridical system. The State would be misusing its limited resources trying to enforce our juridical system, for the cause of the problem of informal economy is not the lack of law enforcement, but the complexity of the existing laws themselves.
The more difficult it is for a person to comply with the juridical system, the more he/she will be tempted to ignore the laws. For many guatemalans, it is more attractive to take this risk than to formalize their business.
The two main problems with our juridical system are the following: The lack of access to management authorities and the complexity of our legislation, which is hard to interpret and apply without having to seek expensive and, for most of the population, inaccessible counselling services.
How can we eradicate informal economy? By symplifying the juridical system and making it accessible and understandable to the whole population.
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