A directive from the Taxation authority transforms the sales tax paid for packaging and packing material into an additional cost for industries.
Wednesday, August 29, 2012
A statement from the Chamber of Industries of Costa Rica (CICR) reads:
Industrial products seriously affected with new guideline by tax authority
- Rising prices of domestic products compared to imported ones is a blow to competitiveness, putting jobs at risk.
- "Disguised" Tax package will be paid by the poorest sectors of the population, denounces the CICR.
August 2012. For many years, industrial companies have seen changes in the rules regarding returns of sales tax on packaging material for their products. This, together with the various interpretations applied by management or officials, has adversely affected businesses, even going so far as to make them pay for previous periods because of divergence of views by Treasury officials.
The Costa Rican industry believes that the position taken recently by the Tax Authority in Guideline 02-2012 of July 31, 2012, which states that sale tax returns are inapplicable for packaging, will cause industrial companies to assume as a production cost any amounts paid as sales taxes of packing material, thereby affecting the price of the final product. This will affect consumers because of the increase in the price of consumer goods. By increasing the cost of production of goods made in the country, the competitiveness of domestic firms is affected, because on the one hand it puts them at a disadvantage with the imported product, and on the other it increases the costs of goods for export.
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Employers claim that the increase in sales tax has repercussion on the entire production chain, affecting their international competitiveness.
On the issue of exports, prices are practically set by the international market, meaning that agricultural exporters will have to implement new measures to become more efficient, in order to allow them to keep competing internationally.
The 38% increase in electricity costs in the last 14 months has strongly affected the cost of production, causing a loss in competitiveness for domestic production.
A statement from the Chamber of Industries of Costa Rica (CICR) reads:
Industrialists propose joint solutions to the high cost of electricity
Food businesses in Costa Rica are calling for the elimination of treasury guidelines preventing them from applying tax credits on packaging material for their products.
A statement from the Costa Rican Chamber of Food Industry (CACIA) reads:
The Food industry considers it urgent that the Treasury reapply tax credits on product packaging
Costa Rican industrialists believe the VAT exemption proposed by the Executive will be ineffective.
A press release from the Costa Rica Chamber of Industry states:
Surprised. This was the reaction of industrialists on learning of the filing of an amendment to the Solidarity Tax Act Project by the Ministry of the Economy and Ministry of Finance, relating to value added tax.
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