Industry Unhappy with VAT Exemption

Costa Rican industrialists believe the VAT exemption proposed by the Executive will be ineffective.

Friday, November 4, 2011

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.

The motion includes a list of exempted goods, which does not take into account all the industrial raw materials used in their production, such as packaging material, labels and electricity.

"We were taken aback by the filing of this motion, which we have not had the opportunity to study in detail, however, based on information shared with the press through a newsletter, it does not represent an acceptable situation for most industrial enterprises who produce exempted goods", said Marco Meneses, President of the Costa Rican Chamber of Industry.

"While we know that the government has heard our argument with regard to the way the treatment being given to these products will affect competitiveness and therefore impact on the price paid by consumers, the solution seems to be far from acceptable in that it is partial, poorly studied, and above all, has not been discussed", stressed Meneses.

The industrialists are insisting that consideration be given to granting accreditation to all raw materials and inputs used in the production of exempted products, including packaging materials, labels, and electricity, but are still waiting for an opportunity to discuss the sector’s concerns on this matter with both ministries.

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