Costa Rica's Tax "Holes"

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

Monday, February 21, 2011

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.

The Presidency was asked what actions could be taken to reverse the situation and the authorities mentioned "zero tolerance against fraud"; however, as indicated by El Financiero, of 398 processes corresponding to tax crimes, only two reached a guilty verdict.”

More on this topic

Costa Rica: Tax on Holiday Rentals

August 2014

A draft anti tax avoidance law to be discussed by the Assembly in Costa Rica clarifies the obligation to pay sales tax on homes rented out for less than a month.

Sales tax on holiday houses rented to tourists is already covered in the General Sales Tax Act, but in practice "... this obligation is often breached by owners," affecting the formal hotel sector, which has to pay the same tax.

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.

Tax Reform Necessary

November 2012

The tax system in Costa Rica is chaotic, complex, unfair, disproportionate, inequitable, and ineffective, which affects development and competitiveness, encouraging tax evasion and smuggling.

In an analysis piece in items, Danilo Villalta notes the need for comprehensive reform of the Costa Rican tax system, starting with a "strategic planning process" to approve a plan "agreed with the various political forces, and subsequently according to that plan, develop bills with the participation of specialists in order to have legislation that is clear, transparent, simple and easy to apply by the administrator and the taxpayer. "

Tax Evasion in Guatemala Reaches 7% of GDP

January 2011

There is urgent need to strengthen the Superintendence of Tax Administration (SAT) with audit and control instruments.

Tax evasion reached $ 2,500 million, and businessmen insist that before a tax reform is passed, increasing tax burden and affecting competitiveness in the country, it is required "to improve the fight against tax evasion and customs smuggling."

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