One Step Closer to a Tax Reform

The Costa Rican Congress has approved a fast track bill that would transform sales tax into a VAT of 13% and establish a 4% rate on the purchase of packaging, wrapping and raw materials, among other things.

Thursday, March 1, 2018

The bill that could be approved by the Legislative Assembly also includes "... taxes on books in all their formats, air tickets, purchase of packaging and raw materials, as well as equipment and machinery (except if there is an express exoneration) and services for agricultural and agroindustrial production."

See "Costa Rica: More Warnings Over Fiscal Deficit"

The initiative also contemplates charging a 15% tax on capital gains. The 13% Value Added Tax would be levied on the other assets, with some exceptions and maintaining the exonerations in force.

See also: "Juggling public finances"

Nacion.com reports that "...The plan also proposes establishing a ceiling of ¢5.4 million on the salaries of public officials and the heads of State Powers and Public Administrators. The equivalent of 18 minimum monthly salaries for the lowest income category in the private sector."

More on this topic

Tax reform: Partial Solution

October 2018

The business sector welcomes the progress achieved with the tax reform approval in the first debate, but notes that it does not fully solve the financial problems facing the government.

In the debate last Friday, the representatives approved the file number 20.580, known as the tax reform law.

Costa Rica: Tax Reform Moves Forward

August 2018

Leaving out VAT on private education and the basic basket, the substitute text of the bill to Strengthen Public Finances was approved in the legislative committee.

The controversial substitute text of the Bill Strengthening Public Finance that has already passed the first filter, and may now be analyzed by the Plenary of the Assembly, left out two of the taxes that the Alvarado administration intended to implement in its plan: VAT of 1% and 2% on products in the basic basket and 2% on private education services. 

Fiscal Crisis: Children and Stepchildren

April 2016

As in old fashioned patriarchal homes, if there must be suffering, the first to suffer are the stepchildren, and only afterwards, if necessary, the legitimate children.

EDITORIAL

The announcement by the Solis administration that it has a plan B in case it does not manage to get legislative approval for the proposed tax increases designed to address the serious and growing fiscal deficit, highlights the existence in Costa Rica of first class citizens and second class citizens.

Progress on Approval of Tax Reform in Costa Rica

November 2011

After being approved by the Special Commission, the bill has moved on to the legislative plenary discussion.

The project aims to reduce the fiscal deficit, which currently stands at 3.2% of gross domestic product, and could be approved by the plenary of the Legislative Assembly before the end of the year.

 close (x)

Receive more news about Economics

Suscribe FOR FREE to CentralAmericaDATA EXPRESS.
The most important news of Central America, every day.

Type in your e-mail address:

* Al suscribirse, estará aceptando los terminos y condiciones


Tailor made software for construction companies

O4Bi is a system that allows to control and manage what a company needs: the complete process of development of works, accounts receivable, treasury, banks, sales and accounting.
O4Bi is a very robust system that allows to control and...

Stock Indexes

(Apr 6)
Dow Jones
-5.60%
S&P 500
-5.10%
Nasdaq
-5.64%

Commodities

(Oct 15)
Brent Crude Oil
80.090
Coffee "C"
122.75
Gold
1,228
Silver
14.72