Bankers and businessmen are pressuring the government to remove the guideline which aims to retain 1.77% of each transaction as advance payment of income tax, scheduled to start on December 1.
The private sector argues that "...The decision of the Directorate General of Taxation (DGT) ignores the fact that neither card issuers nor financial institutions in the country can be considered as 'withholding agents' as this must be defined by the appropriate Act. "
The Ministry of Finance is working on a bill that aims to review and eliminate tax exemptions that have no substantiated legal justification, and create a new regulatory framework.
According to the Ministry of Finance, income not received in 2013 due to the existence of exemptions and special tax regimes was equivalent to 5.93% of GDP, of which 3.7% corresponds to the General Sales Tax, 1, 9% to income tax and 0.3% for other taxes.
The Ministry of Finance has postponed until December 1 the beggining of the 2% tax which will be retained by financial institutions on card transactions.
The aim of this extension is to give banks more time to adapt their systems and make adjustments seeing as they are the entities that must make the retentions.
Deputy Minister of Finance, Fernando Rodriguez, told Nacion.com that "...
The Vice President and the Minister of Finance have insisted that the Assembly adopt a draft law to establish global income and convert the sales tax into value added tax.
This December is the date set for the plan to convert to sales tax into value added tax (VAT) and for the first quarter of 2015, the bill on global income. Also in 2015 a draft law will be submitted on the Framework Law on Exemptions.
Investors are on the alert over possible modification to the Law on Free Zones while analysts are warning that this would generate legal uncertainty.
The government will be revising the law on free zones in order to avoid companies who are not operating under the regime from moving into it and avoiding paying taxes.
The Ministry of the Treasury announced that it will be revising in detail the modification made in 2009 to the law on Free Zones, which since 2010 allowed non exporting companies into the regime as, "there is a fear that there could be a mass movement of local companies into the scheme, which currently pay taxes, and this could lead to a drop in collections."
The Ministry of Finance intends to lower the minimum amount of the value of illegally imported goods which would incur criminal penalties for smuggling from $50 thousand to $10 thousand.
Deputy Minister of Revenue, Fernando Rodriguez, told Ameliarueda.com that the draft reform law, "... is already in the final stage of reform being prepared by the Commission against Illicit Trade and it is expected that the project will be ready next week to then be submitted to the Legislature. "
While the budget increases, the Solis administration is requesting World Bank loans to cushion the public debt, transferring the weight of the expenses to future Costa Rican generations.
EDITORIAL
The Ministry of Finance has asked the multilateral technical assistance agency to analyze the country's debt policy and for an additional loan, the amount of which is still unknown, in order to pay part of the interest on the state's current debt.
Facing a serious and growing fiscal deficit, the Solís administration has presented the 2015 spending plan for the central government which is 19% higher than that of 2014.
Even though the fiscal deficit up to July is already located at 3% of GDP, the government has decided to increase the state budget for 2015 by 19%, which added to the 4% increase approved for public wages and 14% increase in the resources paid to state universities, threatens to push up interest rates and further complicate the economic scenario.
Limiting the deduction of interest from income tax and eliminating the exemption from payment of 15% for dividend distribution between companies are part of the changes included in the project.
The Bill to Improve Anti-Tax Fraud, presented by the Ministry of Finance amends various tax issues that must be taken into consideration by companies operating under Costa Rican law.
A A bill presented in Costa Rica aims to improve tax controls by forcing merchants to accept payments with credit and debit cards.
The bill introduced in the Legislature by the Ministry of Finance, entitled "An Act to improve the fight against fiscal fraud" includes other initiatives such as the imposition of a sales tax on property rentals of less than one month duration.
An announcement has been made that the system of international transfer of goods is now operating normally after having experienced problems since July 29.
The system used by exporters and importers for international transit operations is now operating normally, after having reported failures which had been delaying the operations of carriers since Tuesday 29 July.
The Ministry of Finance is preparing a bill that would require filing an income tax statement before applying for a loan from a bank.
The purpose of this initiative against tax evasion is for the Ministry of Finance to "... have the same status as the Costa Rican Social Security Fund (CCSS), ie that people must be up to date with payments to the institution in order to make arrangements in the public sector. "
The Ministry of Finance of Costa Rica is contemplating lifting bank secrecy for large contributors who declare minimal gains or losses on their tax returns.
Crhoy.com reports that "... after finding an increase in the number of companies reporting losses, the Large Taxpayers Department began implementing a new methodology for that group and found evidence that there may be information unreported by companies. "
The seriousness of the situation of Costa Rican pension system and its negative effect on public finances has been highlighted.
From a press release issued by the Costa Rican Union of Chambers and Associations of Private Enterprises (UCCAEP):
The UCCAEP is deeply concerned about a recent announcement by the Ministry of Finance regarding the amount allocated to the pension scheme under the National Budget of the Republic.
The World Bank has agreed to maintain funding for some of the works that make up the project to modernize the infrastructure of the port and the city for $72 million.
After having rejected the request to extend the loan for $72 million made by the administration of Luis Guillermo Solís, the World Bank has agreed to review the conditions of the loan and maintain funding only for certain works of the project, which will be defined by the entity depending on what state of advance they are in.