Costa Rica: Incentives for Debit Card Use

The bill against tax fraud authorizes the Ministry of Finance to return up to 1% of sales tax paid by final consumers.

Wednesday, October 5, 2016

The return of that percentage, which would be a maximum of 1% of the general sales tax, would be subject to ranges and types of trading activity, as explained in the Bill to improve the fight against tax fraud.

Nacion.com reports that "...The initiative was approved in a first debate on September 9 and is under consultation in the Constitutional Court. The proposal does not limit the incentive only to debit cards, but the deputy finance minister, Fernando Rodriguez explained that the Ministry of Finance that it was decided that for now, it will only apply to these instruments, which will be established in the regulations. "

Rodriguez added "... 'We did not want to get involved with credit cards because we do not want to encourage borrowing, but simply a change in the means of payment'. Currently, financial institutions offer their own incentives to use cards.  For example, points can be redeemed for cash, miles and rewards or discounts in some shops, among other things."



More on this topic

New Tax Law in Effect in Honduras

January 2014

The recently published new legislation establishes an increase of 12% to 15% in sales tax.

The Law on Ordering Public Finance, Control of Exemptions and Antievasion Measures includes 72 foods which had been excluded from payment of Sales Tax (ISV by its initials in Spanish) among which are ribs of beef, pork, chicken, natural cows milk, pasteurized milk, whole milk powder, butter and others.

New List of Products Exempt from VAT

May 2012

In Costa Rica, the Ministry of Finance has published a new list of products exempt from the basic VAT of 13%.

The Ministry of Finance has decided to include in the list of exemptions meats such as steaks, ground beef, sirloin tip, brisket, liver and tongue, and others.

Also exempted is honey, fish, other than those consumed by higher income sectors, such as tuna filets, cod and salmon, reported Nacion.com.

Tax Review of Basic Food Products

May 2012

Costa Rica's government has amended a decree issued last week which levies with a tax of 13% products like wheat flour bread, milk and packaged beans .

Besides the aforementioned products, others that remain exempt from the 13% Sales Tax (IV in Spanish) include tinned tuna, with or without vegetables, sausages packed in sealed plastic, and cheese packaged in sealed plastic without any degree of maturation.

Costa Rica's Tax "Holes"

February 2011

The state loses about $ 2.202 million in taxes, equivalent to 5.8% of the GDP.

Weekly publication El Financiero analyzed the main reasons why taxpayers are failing to pay taxes, stressing the evasion of the sales and income taxes.

According to the study, fraud in these 2 types of taxes implies $ 1.988 million per year, about 5.2% of GDP, money which does not go to the National Treasury.

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