Poll Has Tax-Dodging As National Sport In Costa Rica

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

11 July 2002

After polling 600 citizens in May to ask them their opinions on paying taxes, Costa Rica's National University found that taxes aren’t collected fairly, and people don't think that they get enough services in return for the taxes they pay.

The University’s Institute for Social Population Studies found that a shocking 78% of respondents said they try every day to find new ways of dodging their tax obligations; and more than 50% of taxpayers admit to hiding some of their taxable income from the government.

Taxpayers know they can get away without paying, because resources to enforce tax laws are insufficient and sanctions rarely applied. "The problem with tax reform is political as well as technical," explained university economist Francisco Sancho. "Reform packages have been introduced, but only now are multiple sectors, together, beginning to discuss the problem. Until a ‘social sanction’ exists for not paying taxes, we’re never going to make any progress with tax collections."

Most respondents thought that the government could do a better job of spending the money it did collect; and 92% thought that, rather than increase taxes, the government should improve collection techniques. In fact, there is a Tax Organisation Bill before Congress, which seeks to improve collection methods and rationalise the tax structure, but it is proving contentious.

The poll also questioned citiziens on their faith in new President Abel Pacheco's ability to improve matters, with generally favourable results. According to local newspaper The Tico Times, this creates a window of opportunity for change, and Mr Sancho agreed, saying: "Don Abel, at this time, has a great capacity to bring people together. Now would be a good time to get everyone involved and send a clear message that taxes have to be paid."

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