U-Turn in Outsourcing of Tax Collection

In Panama a new constitutional ruling prevents outsourcing of tax collections to private natural and legal persons, repealing a presidential decree.

Friday, February 5, 2016

The Supreme Court (CSJ) declared as unconstitutional paragraph 3 and subsequent paragraph of Cabinet Decree 109 of May 7, 1970 that allowed the public function of tax collections to be carried out by private individuals and corporations, which was aimed at monitoring the collection of taxes.

The decision affirmed that "... the management of tax collections by third parties outside of the administration, even when backed by appropriate administrative actions, constitutes a violation of the constitutional postulate that assigns this task exclusively to the President of the Republic in association with the respective minister ", reported Prensa.com.

"... Allowing a natural or legal person to perform debt collection on behalf of the State, compromises the confidentiality of taxpayer's data. Article 42 of the constitution in which it is stated that everyone has the right to have their personal information respected and for it not to be disclosed, especially in a system that relies on databases and public records " is also a violation.

More on this topic

Costa Rica: Register of Shareholders Will Have to be Submitted

August 2017

The First Chamber has dismissed a motion by the Chamber of Industries, and the Taxation department will be able to require large taxpayers to present information deemed sensitive in the AMPO system.

From a statement issued by the Ministry of Finance:

Costa Rica: Shareholder Register Will Be Mandatory

January 2016

An appeal by the private sector has been rejected and the Treasury will be able to require large taxpayers to be included in the AMPO system which contains information deemed sensitive.

From a statement issued by the Ministry of Finance:

The Ministry of Justice has finally decided in favor of the Tax Administration, in the process that the Chamber of Food Industry and several coadjuvants filed against the Scheduled Analysis Multifunctional and Target tool (AMPO).

Concern about Privacy Leaks for Shareholders

February 2015

The private sector in Costa Rica is having doubts over the ability of the Treasury to prevent information leaks, if approval is given to a requirement for companies to disclose shareholder information.

The business sector fears that the authorities will not be able to control possible leaks of confidential data which companies must provide if the decree proposed by the Directorate General of Taxation is approved.

Binding Nature of Tax Consultations

July 2012

In Costa Rica a bill on Tax Management will categorize tax consultations as for information only, and will eliminate the option of appealing.

Writing in ELfinancierocr.com, lawyer José María Oreamuno points to the double error that would be committed if the project called "Law on Strengthening Tax Management" were adopted, because the Tax Administration would not be bound by the answers it provides to taxpayers making inquiries, and because it thoroughly eliminates the possibility of appeal.

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