Costa Rica To Eliminate Hotel Tax

by Leroy Baker, Tax-News.com, New York

24 November 2008

In an attempt to boost its national tourism sector, the Costa Rican Congress has approved a bill which eliminates the 3% tax on hotels.

“We are eliminating the 3% tax on hotels which foreigners and Costa Ricans pay at all tourist lodgings, from hotels to cabins, which we believe has been unfair," said Minister of Tourism, Carlos Ricardo Benavides.

To offset the elimination of the hotel tax, a new USD15 tax is also proposed in the same bill, and this will be charged to each person who enters Costa Rica by air, provided that the ticket is purchased abroad. The Costa Rican Tourism Institute (ICT) expects to collect around USD25m with this tax.

Lawmakers must approve the plan in a second vote before President Oscar Arias signs the measures into law.

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