OECD Insists on Shareholders Registry

The organization has once again supported the initiative that the Costa Rican government has control over the register of shareholders of companies classified as large taxpayers.

Tuesday, February 16, 2016

"The state must have in its hands information on the shareholders of companies and where dividends go to. In a democracy like this it is very difficult to understand how, who and why people can oppose the state having that information, " said the secretary general of the Organisation for Economic Co-operation and Development (OECD) Angel Gurria to Nacion.com.

See: "Costa Rica: Shareholder Registry Will Have To Be Revealed"

"... The authorities have to know who are the owners and for that there are only two ways: via registration or tax returns of each person. What is not possible is that the information is kept in companies and these companies tell an inspector to come and review the books, when in this country we have 400,000 companies of which 350,000 are inactive, " added the official.

See: "Business vs.Government Over Register of Shareholders"

The OECD revealed that during its assessment of the economy of Costa Rica, that "... tax revenues are low and spending is increasing rapidly. Competition in the banking sector and financial systemic risks remain a concern. Low productivity and barriers to entrepreneurship hinder income convergence. Transport infrastructure is poor due to a complex institutional framework. "

Read full report by OECD.

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More on this topic

Guatemala: Avoiding the "Gray List"

May 2017

The government is warning that if the agreement on Mutual Administrative Assistance in Tax Matters is not ratified, the country is at risk of being included in the lists of non-cooperating countries.

The Guatemalan Ministry of Finance describes as "indispensable" the ratification by legislative of the Convention on Mutual Administrative Assistance in Tax Matters adopted by the Council of Europe and member countries of the Organization for Economic Co-operation and Development (OECD) 

Costa Rica as Seen by the OECD

June 2016

The organization says there is an urgent need to raise revenue and reduce expenses, "including the public sector wage bill, which is growing rapidly."

The report "Economic assessment of Costa Rica 2016" by the Organisation for Economic Co-operation and Development (OECD) highlights the fiscal problem as the main challenge for the country on its way towards accession to the bloc. 

Main challenges and key recommendations for 2016-17:

Tax revenues are low and spending is increasing rapidly, pushing public debt to high levels. Public administration is highly fragmented and the Ministry of the Treasury has limited control of the total public expenditure.

Reducing the central government deficit by 2% of GDP during 2016-17 and then an additional 1.5%, approving and implementing the proposed tax reform, combating tax evasion, removing tax exemptions that have no economic or social justification, and containing expenditure growth.
Introducing a medium-term fiscal framework with a clear and verifiable rule for expenses.
Improving efficiency in public spending by strengthening the authority of the Ministry of Finance to control overall public sector spending and introducing a results-based budget.

Read full report "Visión General Costa Rica 2016" and "OECD Economic Surveys: Costa Rica 2016"

Companies vs. Government Over Shareholder Registry

January 2016

In Costa Rica the private sector claims that the Ministry of Finance is not telling the truth when it there is an essential need to create a register of shareholders under its control in order to comply with the OECD.

From a statement issued by the Costa Rican Union of Chambers and Associations of Private Business Sector (UCCAEP):

Costa Rica: Tax Exemptions Revised

February 2015

As part of a plan to reduce the fiscal deficit, the Finance Ministry is preparing a bill which aims to amend the existing tax exemptions scheme.

This project also seeks to create penalties for 1,259 misuse of tax breaks reported by the Technical Services Department up until 2014. It is anticipated that the initiative will be submitted to the Legislature in no more than two weeks.