A proposal to create a temporary tax to fund the fight against corruption has sparked the reaction of entrepreneurs, who are demanding that "the house be cleaned first."
An article on Prensalibre.com reported that the president of the Coordinating Committee of Agricultural, Commercial, Industrial and Financial Associations (CACIF), Jorge Briz said: "Before another tax, you must first clean house. Every year the Government and the State have more income tax issues, but there are fewer results. "
A proposal has been made to create a special and temporary tax on assets above a certain amount in order to finance the operations of the Public Prosecutor against impunity and corruption in the state.
Ivan Velasquez, head of the International Commission against Impunity (CICIG), believes it is necessary to move on from "... discussing corruption to taking action", and therefore is proposing, together with the Public Ministry, the creation of a new tax to strengthen the institution's budget in the fight against impunity and corruption.
A postponement has been made until January 1, 2016 of the entry into force of the measure which requires companies with annual purchases of goods and services worth over $10 million to retain 50% of the tax on transfer of movable property and services.
After the business sector asked for more time to implement the necessary changes to start withholding the tax, the Ministry of Finance decided to postpone entry into force of the measure until January 1.
Operators are opposed to the proposal to tax phone bills and purchases of technological equipment, while the government has shown itself unwilling to cooperate by reducing tariffs.
While the government insists that telecommunications companies must lower telephone rates in order to minimize the impact of a future tax of 10% for public security, telecoms companies have defended themselves arguing that "... the process of approval of charges and maximum fees does not depend on the willingness of companies, but the process defined in the regulations established for that purpose. "
The food industry has opposed the proposal by Solis administration to levy a tax on non-returnable plastic containers, as a measure to discourage their use.
José Manuel Hernando, President of the Costa Rican Chamber of the Food Industry, explained that "...
Among the new features are VAT refunds to those who pay for private medical practices with cards and the establishment of a new fiscal year, from January 1 to December 31.
From a statement issued by the Ministry of Finance:
The Constitutional Court has rejected the constitutional challenge presented by the business sector and left in place the collection of 1.5% income tax.
The Supreme Court has confirmed the income tax of 1.5%, which applies to companies reporting net sales of over $456 000, leaving exempt from this charge those reporting lesser incomes and those with less than two years of being established.
A bill seeks to tax public and private organizations producing electricity for commercial purposes, with a levy of one cent per kilowatt hour of energy produced and sold.
From a statement issued by from the Chamber of Industries of Costa Rica (ICRC):
The new draft law on tax fraud prepared by the opposition and which must be reviewed by the Ministry of Finance excludes the concept of collection and seizure by administrative authorities.
After having negotiated for the opposition bloc in Congress to amend the bill originally submitted by the Ministry of Finance, the new bill is ready and among the changes is the elimination of the incorporation of the concept of fines and embargos imposed administratively. It maintains the collection and seizure of tax debts through the courts.
Progressing through the assembly is a bill that aims to raise the tax burden from 15% to 18% over the next five years, without establishing limitations on expenses and borrowing by the state.
In order to pay for the increase in pension payments, an increase has been made to taxes on extraction of aggregates, which represents an increase of 12 to 25% in the price of housing.
Government officials say that the new tax on the final price of housing only represents an increase of 1%, while the construction industry argues that prices will rise by 25%. In light of this situation different unions have presented several alternatives, including a 0.5% increase on building permits and raising the tax on casino winnings by 5%.
In its comments on the bill on income tax and sales reforms currently under public consultation, a request has been made that financial institutions be subject to a system of global and not published income.
From a statement issued by the Costa Rican Banking Association (ABC):
ABC submitted their comments on the draft amendments to the income and sales taxes
Experts warn that the draft law which aims to raise income tax and convert sales tax into value added tax might not be approved for two years.
The lack of consensus between the Ministry of Finance and the President of the Republic, Luis Guillermo Solis, is sending mixed signals on some aspects of the tax reform.
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