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Costa Rican Gambling Industry Protests Planned Tax Hikes

by Mike Godfrey, Tax-News.com, Washington

14 October 2002


The Costa Rican gambling industry turned out in force last week to protest against in front of the Asemblea Nacional against planned tax increases designed to address the government's deficit and long-term debt problems.

The Costa Rican authorities have proposed a number of tax changes in addition to the tax hikes for sportsbooks. These 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, and a $50 annual tax on mobile telephones.

However, the gambling sector warned last week that the $1,000 per month (now revised down to $500) tax on computer terminals used to place internet bets, and $500 monthly charge for casinos per slot machine, are likely to lose the authorities more revenue than they gain.

The AM Costa Rica news service on Friday quoted sportsbook operators as observing that if the proposed taxes pass, 'all of Costa Rica will pay for this error of the government. The [cash] cows will go to Belize, Nicaragua and Panama.'

The local news service went on to observe that: 'In exchange for trying to get 6.6 billion colons in tax each year, the lawmakers risk losing 175 billion colons in salary, taxes, and other payments.'

The Costa Rican gambling industry is also under threat from the United States, which is trying to prevent US citizens from utilising offshore gambling services, by seeking agreements with credit card providers that they will not authorize payments to Costa Rican sportsbooks.

A comprehensive report on the online gambling situation in a number of offshore jurisdictions is available in the Tax-News Reports shop at http://www.tax-news.com/reportshop/

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