In Costa Rica, the Alvarado administration would be considering the creation of a tax on each transaction that a person or company makes through a financial entity, a tax that will discourage savings and motivate people to use cash.
In order to discuss a medium and long term credit with the International Monetary Fund, the Costa Rican authorities would be planning to design and create a new tax, which consists of each person paying a tax of ¢3 for every ¢1.000 in the transactions they make through a bank, finance company, mutual fund, stock exchange or any other financial entity.
The Ministry of Finance has announced that tour operators and travel agencies are not subject to the 2% deduction relating to advanced income tax payment on credit card transactions.
From a statement issued by the Presidency of the Republic of Costa Rica:
Market actors in El Salvador claim that transactions are being subjected to double retention, both by brokerage firms and the bank related to it.
Because of the speed with which the financial sector has been forced to comply with the withholding tax on financial transactions, effective from September 1st this year, the same market participants are claiming that investors are suffering because they are being billed the tax twice on each transaction.
Although the banks had sought to extend the term, starting September 1 entities must charge 0,25% on operations over $1000.
From September 1 banks, credit unions and savings and loans companies must withhold 0.25% for every transaction in made in cash, by check or electronically worth over $1,000.
The Directorate General of Internal Revenue, at the Ministry of Finance has published the regulations that refer to the new taxes. The Salvadoran Banking Association (ABANSA) told Elsalvador.com that "... Banks, which are from today retaining the tax, are still analyzing the document. The president of the bank union, Armando Arias said in recent days that because they are not equipped with technological resources and trained personnel, they will begin collecting taxes manually, generating more delays for customers in the banking system. "
The banking sector has requested a period of 6 months before starting the process of withholding tax on financial transactions as approved during a recent tax reform.
The Salvadoran Banking Association (Abansa) requested an extension of 6 months for the start date for collections of the tax on financial transactions, pushing it back to February 2015 instead of 1 September, as planned by the government.
A potential tax on financial transactions would discourage investment in the stock market as securities would be taxed each time they are traded.
In light of a tax proposal that would tax at 0.25% per $750 all kinds of securities, including repos and securitizations, the Stock Exchange of El Salvador (BVES) has expressed its concern for contracts already traded on the market and its dampening effect on investment.
Warnings have been given that the tax in the approval process in the Legislature would create more evasion affecting all sectors of society.
The new tax would be of 0.25% on financial transactions exceeding $750, applied to the deposit holders who ordered payments or transfers and financial entities performing loan disbursements of any kind.
Added to the normal negative effects of a new tax, such as being an incentive for evasion, discouragement of investment, and in this case generation of inflation, are also "... The ambiguity in the wording ... "it is not clear if this excludes tax remittances, since ' ... the majority of remittances entering the country are money transfers to third parties using an electronic system.'
It would affect the banking sector in El Salvador, lowering the volume of transactions in the financial system, and increasing the price of money.
The Salvadoran Banking Association (Abansa) is studying a proposal by the Ministry of Finance to tax the issuance of checks and electronic transactions, but its representative Marcela de Jimenez has already indicated her criticism, noting that it has not been ruled out "that this tax will affect the banking system, ie, there will be a decrease in the level of resources that are traded through the financial system and therefore an increase in the price of money. "
The bill proposed by the government will levy a tax of 0.25% on the amount of electronic transactions and checks.
The bill entitled "Law on Taxes for Financial Operations", introduces a tax on checks and electronic transfers and a tax to control liquidity that applies to those transactions amounting to over $3,000.
Warnings from Honduran businesses about the flight of capital resulting from the application of the controversial tax on banking transactions (known in Spanish as the ‘Tason’), are coming true.
This is how representatives from Honduran companies explained things, after statements from President Porfirio Lobo recognized a reduction in revenue because of the "Tason".
The Supreme Court has acknowledged a motion of inconstitutionality submitted by the Association of Industrialists.
In order to stop the government from collecting the charges known as the "security tax", Honduran businessmen have filed an appeal with the Supreme Court.
The Council of Private Enterprise and the Industrial Association of Honduras are to interpose a constitutional challenge.
In coming days, both associations will lodge appeals with the Supreme Court of Justice (CSJ) against the Law on Income and Efficiency in Public Expenditure.
An article on the website of La Tribuna reports, "The law which aims to challenge businesses establishes a fight against tax evasion, reduction of costs and compensation for credit and debit card users, and to separate the Administrative Office of Seized Goods (OABI) from the Public Ministry (MP), and which remains assigned to an agency of the executive branch. "
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