Tax reform: Partial Solution

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.

Monday, October 8, 2018

In the debate last Friday, the representatives approved the file number 20.580, known as the tax reform law. The approval was optimistically received by the Costa Rican Union of Chambers and Associations of Private Business Sector (Uccaep). However, they affirm that several adjustments should be made to public spending to achieve long-term solutions.

Gonzalo Delgado, president of Uccaep, said to that "... This legal project (tax reform) is an important step in the right direction. However, it is clear to us that this measure will not solve all of Costa Rica's financial problems. We have to understand that our country is in a complex moment and we need to move forward in solidarity and quickly to find a solution to the financial crisis that is already affecting us."

See "The Unstoppable Public Debt"

Delgado added that "... Costa Rica needs to be organized and move along safer lines in the financial balance, where it is urgent to formalize the informal sector that reaches 44%, support a single pension system, monitor salary bonuses, as it is urgent to reactivate the economy and get the country on its way."

One of the main changes included in the approved law in the first debate is the replacement of the current general sales tax by a value added tax (VAT). With this change, the taxation is extended to services which until now were not covered by the sales tax.

Also see "Tax Reform is Not Enough"

The tax reform project includes tax-exempt services such as professional services, gyms, streaming applications and other diverse services such as Uber and Netflix. reports that on the subject of salary "... Two new steps are created so that those who earn contribute a higher percentage of income. Now, this collection is made on the salaries superior to ¢817.000 with a 10% or a 15% of the surplus, according to the amount. However, they will be charged up to 25% with the reform." See "This is how the tax reform approved in the first debate was concluded"

Do you need more information about your business sector?

Request more information:

this site is protected by reCAPTCHA and Google's privacy policy and terms of service.
Need assistance? Contact us
(506) 4001-6423

More on this topic

Unacceptable Taxes

March 2019

Although Costa Rica's fiscal reform has already been approved, the IMF proposes raising some taxes as part of an "additional adjustment" to reduce debt and ease financial pressure in the short term.

"... “We are negatively surprised by the simplistic position of the International Monetary Fund that in the absence of money, taxes should be raised, we consider those words unacceptable, because it has been demonstrated in this country that a large part of the deficit is because of the inefficient use of public funds and an issue of state efficiency that does not allow people to become businessmen," said UCCAEP President Gonzalo Delgado."

Tax Reform: First Step

December 2018

Alvarado administration celebrates the approval of the tax reform in Costa Rica by announcing a series of initiatives that include, among other things, a public employment reform Project.

After a year of proceedings in Congress and after having been reviewed by a Constitutional Chamber, the country's Assembly finally approved file 20.580.

One Step Closer to a Tax Reform

March 2018

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.

The bill that could be approved by the Legislative Assembly also includes "...

Costa Rica Announces Fiscal Consolidation Plan

October 2013

On top of the adoption of VAT, global migration tax, and global income tax already announced in previous plans, there is now a containment cost to be added through adjustments to the State payroll.

An article in reports that "The Ministry of Finance today released a discussion agenda which will later have to be submitted to the Legislative Assembly in the form of a draft tax reform which will, between cost savings and new revenue, generate 3.5 % of Gross Domestic Product (GDP) in five years. With this relief to public finances, the fiscal deficit would grow at rates that are more manageable than the 5% of the projected production for 2013. "

 close (x)

Receive more news about Government

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
S&P 500


(Feb 27)
Brent Crude Oil
Coffee "C"