Costa Rican industrialists warn that increasing the minimum wage in the private sector by 34% will cause more unemployment and encourage more companies to operate unofficially.
The bill concerning the minimum wage will endanger plans for new hires in the private sector, and its passage into law could cause more informality and more unemployment. The proposal aims to increase the minimum wage by 34% for unskilled employees in the private sector. With the increase, the salary would go from $534 to $718.
In countries where airlines work closely with airport authorities and governments, the sector's development has been remarkable, as is the case of Panama.
Air connectivity in Latin America and the Caribbean is expensive: there are 130 different taxes on airfare, costs which are charged to companies, individual travelers, the aviation industry and tourism in general. Therefore, in countries where airlines work closely with airport authorities and governments, the sector's development has been remarkable, said Tony Tyler, CEO of the International Air Transport Association (IATA) to Martesfinanciero.com.
Companies have to allocate up to 15% of expenses to security services, as a result of the growing violence in the country.
A company wishing to operate in Guatemala has to allocate between 8 to 15% of its expenses to security in order to keep operating. The figure was provided by Victor Guillen, manager of purchases, imports and exports at Dagas, and published by Elperiodico.com.gt, who revealed that his company earmarked Q250 thousand ($32,000) per month for the security of its plants, trucks and workers.
The government affects the activity with bureaucratic costs of more than $3,500 for companies who want to use drones.
While in the US there is an online registration process where companies and individuals pay only $5, in Costa Rica the Directorate General of Civil Aviation does not seem to be interested in encouraging the market. An investigation of Elfinancierocr.com reveals that $1,874 has to be paid to obtain certification and to commercially operate the drones, plus $94 per license, an insurance policy for liability and damage to third parties (which is around $1,800), and a course taken whose price varies depending on the school teaching it.
The government is proposing relaxing charges for maritime entry, waste collection, and security, and is awaiting a response from users of the Free Zone on 1 March.
The proposal sent by the Government of Panama to the Association of Users of the Colon Free Zone (AU) provides for reductions in the charges for maritime entry from $150 to $25, as requested by the AU, a reduction in the fee for waste and security services and a change in the use of the declaration of commercial movement.
The lack of tax incentives has led to 55 companies leaving the free zone in January 2016, on top of the 125 who ceased operations last year.
In total, from 2015 to now, about 180 companies requested the removal of their key operations in order to cease doing business in the Colon Free Zone (CFZ), according to the Association of Users of the CFZ.
Seeking solutions to the threat of insolvency of the pension system, the Costa Rican Social Security Department is analyzing increasing contributions to the fund for disability, old age and death from 8.5% to 14%.
An article on Elfinancierocr.com reports that "...
Florexpo indicates excessive paperwork as the main reason behind the decision to close its operations in Costa Rica and move to Guatemala, making 400 employees redundant.
"In Guatemala an import permit seed is processed in two weeks and is effective for one year, while in our country, unfortunately, the process takes four months and the validity of the permit is for a month, this made it impossible to program negotiations and increased business costs by 300%. "
The current tariff was established in 2005 but when it comes time to paying at the counter this rate increases because of additional charges, it is for that reason that the Superintendency of Competition (SC) through means of a study is proposing a revision and update of the existing rates, adding in these elements.
Noting high production costs, Incesa has announced the closure in Costa Rica of its sanitary ware manufacturing plant, and its installation in Guatemala and Nicaragua.
Incesa Standard, a subsidiary of the Colombian company Corona, will start closure of operations gradually over the first six months of the year. The company argues that in the production process costs for labor and energy are very high, preventing the continued operation of the plant in the country.
Electricity distribution companies will receive about $300 million less in state subsidies leading them to foresee an increase in rates which will affect the productive sector.
The State will compensate only the Chiriqui electricity distribution company (Edechi) with $27 million and the electricity distribution company Metro-West (Edemet) with $38 million, ceasing to give subsidies to the company Ensa.
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