Honduras: Changes to rules under Fiscal Responsibility Law

Resolution No. 403-2026 (published in the official gazette No. 37,196 on July 17, 2026) introduces the changes below under the Fiscal Responsibility Law (approved via Decree No. 25-2016 on May 4, 2016, with implementing regulations issued via Resolution No. 288-2016 on August 3, 2016), which establishes the rules and guidelines for the sustainability of public finances in Honduras.

Expanded concept of tax expenditure

• 2016 regulations: Defined tax expenditure as revenue the state foregoes due to exemptions, exonerations, reduced rates, and deductions.
• 2026 amendment: Expands the concept to include exemptions, exonerations, incentives, tax benefits, special regimes, and concessions that reduce the direct or indirect tax burden.

New requirements for approving exonerations and incentives

• Before (2016): A technical opinion of the Secretary of Finance (SEFIN) was required primarily for draft proposals that expanded incentives or tax benefits with a budgetary impact.
• Now (2026): SEFIN’s technical opinion is now mandatory for any draft proposal that:
  • Creates exemptions or exonerations
  • Grants tax benefits or incentives
  • Creates or modifies tax regimes
  • Reduces tax or customs revenue
  • Generates an impact on tax expenditure
  • Additionally, the proposals must specify:
    • Objective of the benefit
    • Beneficiaries
    • Formal and substantive requirements
    • Validity period
    • Taxes waived 

Simplified and updated Registry of Exempt Entities

• Original regulations: The DGCFA managed the Registry of Exempt Entities and required highly detailed information, including projected fiscal cost (foregone revenue).
• 2026 reform: Administration is transferred to the DGEFFA, with an emphasis on:
  • Annual registration
  • Use of both written and electronic means
  • Continuous updating of tax and customs information
  • Annual reporting on:
    • Investments
    • Employment
    • Wages
    • Exports
    • Social responsibility
    • Exempted taxes

Simultaneous tax benefits

• 2016 regulations: Established a detailed prohibition against simultaneously availing oneself of multiple special regimes.
• 2026 reform: Wording is simplified and refers directly to:
  • Article 33 of Decree 113-2011
  • Article 7 of Decree 25-2016

Additionally, it mandates the immediate modification of the entry in the Registry of Exempt Entities whenever a duplication of benefits is identified.

Increased transparency via tax exemption web portal

• 2016 regulations: The Law required the publication of basic information regarding exemptions and exonerations.
• 2026 reform: A more robust approach is established through a web portal that must publish, at a minimum:
  • Tax regime
  • Number of beneficiaries
  • Tax category
  • Type of tax
  • Authorizing law
  • Amount of tax expenditure
  • Jobs generated
  • Exports
  • Fiscal sacrifice

Furthermore, institutions administering special regimes must ensure interoperability with SEFIN and are required to provide information annually.

New concept of fiscal sacrifice

The reform introduces, for the first time, a specific definition of fiscal sacrifice—i.e., the actual cost borne by the state due to foregone revenue resulting from exonerations, exemptions, or tax incentives—which must take into account:

• Domestic investment
• Foreign investment
• Economic growth
• Formal employment
• Exports
• Industrialization
• Socio-economic development
• Environmental impact and other relevant indicators

For more information, contact a KPMG tax professional in Honduras:

Luis Zelaya | lzelaya@kpmg.com