The bill against tax fraud authorizes the Ministry of Finance to return up to 1% of sales tax paid by final consumers.
The return of that percentage, which would be a maximum of 1% of the general sales tax, would be subject to ranges and types of trading activity, as explained in the Bill to improve the fight against tax fraud.
A ruling by the Administrative Court prevents the Treasury from levying sales tax on tourism activities carried out in protected areas.
Activities such as rafting and canopy tours carried out in protected areas remain off the list of taxable activities for sales tax, according to a ruling by the Administrative Court, in response to a lawsuit filed by the National Chamber of Tourism in 2014.
The Ministry of Finance has postponed until April 17 the deadline for companies to make their comments on the draft legislation reforming income and sales taxes .
Originally the deadline for providing comments on the tax proposal was March 27, but at the request of several sectors it has been extended until April 17, according to the chief of Finance, Helio Fallas.
Public consultation is being given to the draft reform proposed by the Ministry of Finance to the Law of General Sales Tax.
From a statement issued by the Ministry of Finance of Costa Rica:
• Proposal is available to read at www.hacienda.go.cr
The Ministry of Finance today made available to the public, a proposal for draft amendments to the Law on General Sales Tax Act and Income Tax, aiming to open up a space to receive observations and recommendations from the sectors and citizens interested in participating in this process, which is needed to strengthen public finances and achieve a National Agreement for Social Development.
Starting in March the Ministry of Finance in Costa Rica will charge sales tax on soft drinks at the distribution stage and not in the final bill to consumers.
In an appeal to the facility to define at what point in the marketing chain sales tax is levied, the General Department of Taxation has announced that starting from March, sales tax paid on soda drinks will be charged on the distribution of product.
The productive sectors are pointing out the negative effects of the planned increase from 13% to 15% in Value Added Tax, and insist on the need to resolve the fiscal problem by cutting state spending.
According to representatives of the productive sector, an increase in Value Added Tax (VAT) will have a negative effect on the economy. For the food industry, the 15% rise could result in the closure of production plants and an increase in informality among businesses.
A bill that the government plans to introduce in the Assembly before the end of year includes transforming the sales tax and into a value added tax and gradually raising the rate from 13% to 15%.
This increase should be available within two years in order to "... stabilize the size of the gap between government debt and gross domestic product (GDP) from 2019 and safeguard macroeconomic stability. "
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.
Up until December 31, 2015 a moratorium will be in effect on the payment of the 13% sales tax on recreational tourism activities in Costa Rica.
The tourism sector will accept the new tax on their terms: desiring an alternative draft law as soon as possible, which exempts legislative procedures and exonerates the charges made before the moratorium.
Ranging from law suits to revoke the decision, to a request for injunction against the Director of Taxation, legal measures are being taken by the guild in Costa Rica to get the collection of the sales tax suspended.
The decision to charge sales tax on companies offering tourist services, retrospectively since 2009, will generate the "... failure of many businesses," warn the authorities of the National Chamber of Tourism (Canatur).
Authorities from Tributación Directa reported that the sales tax on tourist activities will start to be accrued from September 30th.
Despite complaints by tourism entrepreneurs, Carlos Vargas, director of Tributación Directa, confirmed that the tax, which taxes at 13% activities as "... zoos, spa, canopy tours, hiking trails, bird watching activities, and bungee jumps, among other things, "will begin to be accrued on September 30 this year.
A draft anti tax avoidance law to be discussed by the Assembly in Costa Rica clarifies the obligation to pay sales tax on homes rented out for less than a month.
Sales tax on holiday houses rented to tourists is already covered in the General Sales Tax Act, but in practice "... this obligation is often breached by owners," affecting the formal hotel sector, which has to pay the same tax.
In the region the level of sales tax evasion is around 33% on average.
From a statement from the Central Institute for Fiscal Studies (Icefi):
The Central American Institute for Fiscal Studies presents the seventh edition of its analysis of the situation in Costa Rica.
Icefi: It is urgent that the two contending political parties specify a plan that will allow them to balance fiscal accounts and fulfill their campaign promises.
A drop in the collection of sales tax revenue by customs offices and of the internal sales tax confirms a drop in consumption by households and firms.
The decline in imports during the last year, caused a drop in sales tax revenue in customs, which in February, had a real decrease of 1.39% compared to the growth of 18.3% in the same period in 2012, according to calculations made by La Nacion using data supplied by the Ministry of Finance and the Central Bank.
The tax system in Costa Rica is chaotic, complex, unfair, disproportionate, inequitable, and ineffective, which affects development and competitiveness, encouraging tax evasion and smuggling.
In an analysis piece in Elfinancierocr.com items, Danilo Villalta notes the need for comprehensive reform of the Costa Rican tax system, starting with a "strategic planning process" to approve a plan "agreed with the various political forces, and subsequently according to that plan, develop bills with the participation of specialists in order to have legislation that is clear, transparent, simple and easy to apply by the administrator and the taxpayer. "