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Taxpayers with outstanding municipal tax debts will be able to settle their accounts without paying fines or late-payment interest, following the Legislative Assembly’s approval—by a vote of 60—of the “Special Transitional Law Granting Facilities for the Voluntary Compliance of Substantive and Formal Municipal Tax Obligations”. The measure also allows access to payment plans to settle outstanding taxes.
The regulation applies to all 44 municipalities in the country and benefits both individuals and businesses with outstanding tax obligations to local governments. The goal is to facilitate the regularization of taxpayers who, for various reasons, have been unable to meet their payment obligations.
To qualify for the waiver of fines and interest, the debt must pertain to the 2025 fiscal year or earlier. Additionally, the taxpayer must make an initial payment of at least 30% of the total tax amount owed.
Interested parties may complete the process at service points designated by each municipality or through payment mechanisms established by local governments, including bank transfers where applicable.
The law also allows for the request of payment plans—an alternative for those unable to settle the entire debt in a single payment. However, anyone who fails to pay any of the agreed-upon installments will automatically lose the benefit granted by the regulation.
In such cases, the municipality may demand full payment of the outstanding debt and initiate legal action to recover the funds.
During the Finance Committee’s review of the proposal, Mario Durán, the mayor of San Salvador Centro, noted that the municipality has accumulated approximately US$136 million in interest associated with outstanding taxes. He explained that eliminating these surcharges could enable a recovery of around US$59 million in unpaid taxes.
The benefit is available to taxpayers with fines and interest stemming from outstanding municipal taxes, as well as to those who have failed to file tax returns or have not met formal obligations related to their taxes. Individuals or companies sanctioned through an ex officio tax assessment procedure, as well as cases where the municipality has already initiated legal proceedings to collect the debt, are ineligible for this measure.
The regulation will take effect upon publication in the Official Gazette and will remain in force for 120 consecutive days; during this period, taxpayers may take advantage of the waiver of fines and interest to regularize their tax status with the municipal authorities.
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