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03/04/02 . AP . Yahoo News . GUATEMALA
Guatemala says three U.S. fast food chains owe millions in back taxes
Guatemala has accused three U.S. fast food chains of tax evasion and may force them to close some of their restaurants in this country, officials said Wednesday night.
McDonald's Corp., Wendy's International and Burger King Corp. "have deliberately avoided paying millions in taxes," said Mario Rivera, head of Congress' Public Finance Committee.
In a joint news conference with Rene Perez, the head of Guatemala's tax collection agency, Rivera said the Guatemalan chicken franchise Pollo Campero, which has restaurants throughout Central and South American and Mexico, and Patsy, one of Guatemala's largest bakery chains, have also avoided paying millions of dollars in taxes.
Rivera said all five franchises charge their costumers a 12 percent flat tax that is built into the price of the food on their menus. He said the chains have avoided turning over large portions of the money raised from that tax to the government, however, because their restaurants often fail to provide customers with a full receipt.
Without a receipt for every food purchase, Rivera said federal investigators have no record of how much money the franchises are taking in, thus allowing their restaurants to lie about sales totals and avoid paying millions of dollars in taxes.
Rivera said tax officials have been investigating all five chains for a number of months, but refused to answer specific questions about how much each individual franchise owes in back taxes.
"We will apply the law in as strict a manner as possible," Rivera said. "If we determine it's necessary, we will close several of the restaurants affiliated with these chains."
Rivera's announcement came just hours after Congress approved a law that allows federal officials to make public the names of businesses who are being investigated for tax evasion or fraud.
A spokesman for Pollo Campero told local radio stations that his company had done
nothing wrong. Officials from the other four franchises could not be reached for comment