Tax Proposals Raise Stakes In Costa Rican Gambling Sector

by Mike Godfrey, Tax-News.com, Washington

14 August 2009

The Costa Rican Legislative Assembly is expected to vote this month on a proposal to impose a 2% tax on gambling activity.

Reports in the national media had the proposed legislation – which would bring the burgeoning sector into both the regulatory and tax nets – going before the Assembly on August 3.

The Finance Ministry reportedly hopes that the levy would bring in around USD85m in additional revenue, and Finance Minister Guillermo Zúñiga was quoted by industry news provider Gambling911.com as observing recently that:

"The principal idea of the bill is to regulate activity. Gambling is something that we are currently not monitoring and, thus, not taking advantage of. If we can regulate it, it could create millions of dollars for the economy."

However, concerns have been expressed that the imposition of the 2% charge would create an exodus to more tax-friendly climes amongst gambling operators, who are already feeling the pinch, with the vice president of the Costa Rican Association of Casinos, Jorge Hidalgo, quoted by the Tico Times as stating that there had been a 35% drop in activity in recent times.

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