New legislation under consideration in Costa Rica this week will introduce several temporary tax increases in order to address the government's deficit and long-term debt problems.
Reporting on the proposals set to be put forward by the special tax commission, local newspaper A.M. Costa Rica announced that details of the rescue plan should have been released on Tuesday night, but that 'the meeting was still going on at 11am [on Wednesday] with a number of amendments still to be acted upon'.
However, a summary of the planned measures released by the Tax and Budget Ministry (Ministerio de Hacienda) on Monday revealed that the majority of the interim taxes (which are, in the main, relatively easy to collect, and can be imposed quickly while the committee considers what permanent changes should be made to the country's tax code) are designed to target businesses rather than individuals. They include:
- a 5% increase to the 40% corporate tax rate
- increases in 'sin taxes' on products such as alcohol and cigarettes
- increases in highway tolls
- the introduction of a new tax on corporations which would average around $200 per company, per year
- a 50% luxury tax to be imposed on expensive cars
- a $50 annual tax on mobile telephones
- a 200% increase in charges for filing documents at the Registro Publico
According to A.M. Costa Rica, the new proposals will also target specific industry sectors for tax increases. In its report on Wednesday, the news service revealed that if the plan is approved by the Assembly when it comes before it:
'Banks would be hit with an increase from $125,000 to $300,000 for each offshore institution [they] maintain. Casinos would be taxed $500 a month for each slot machine and $1,000 a month for each gaming table...[and] internet betting establishments would be taxed $1,000 for each betting terminal. Some establishments have hundreds of such betting stations.'
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