Legislative recesses delay final OK of corporation tax bill

Lawmakers failed to pass on second reading the tax on corporations at their regular session Thursday.

The afternoon legislative session was interrupted repeatedly by requests for recesses by leaders of the various political parties.

The bill, technically Impuesto a las Personas Jurídicas, expediente N.º 16.306, did come to the floor and was lambasted by Wálter Céspedes Salazar, who said the measure would be costly for small business operators and those in agriculture.

He noted that the measure would place a tax on active corporations and other forms of company ownerships of $316 a year. Inactive corporations would pay half that.

Céspedes said that many banana growers and others have corporations just so they can do business with the state. Yet now they must either pay the tax or pay to have the company dissolved. He said dissolving the corporation would cost 100,000 colons or some $200.

He asked that the tax bill be returned to committee for study. He said to do otherwise would be robbing from the public. There was no action on the request because of the recesses that followed. Then Juan Carlos Mendoza García adjourned at the usual 6 p.m. time.

Céspedes, a member of the minority Partido Unidad Socialcristiana, was also irked because the original amount for an annual corporate tax was $200.

The committee increased the amount by 50 percent.

Some readers have expressed their objection to the bill, and Garland Baker pointed out in an article July 11 that the cost of closing a corporation is about $306, counting notary fees and other expenses, including publication in the La Gaceta
official newspaper. He wrote:

“The proper way to close an inactive company is to go before a notary and change the constitution. Most companies are constituted for 99 years. The notary would change the constitution of the company to only a few months into the future. Once past, the company would be in theory dead. The books then should go to the tax department for cancelation.”

Céspedes was speaking contrary to the sentiments expressed by lawmakers a week ago. Some 39 of them voted for the bill on initial passage. The agenda for today has not yet been published, so it is unclear if the bill will come up for a vote this afternoon.

One reader pointed out that he subdivided land and created a corporation for each lot on the advice of his lawyer. So now he has to pay the tax on 79 separate corporations, he said.

Even in worse shape are the many lawyers who have created shelf corporations to sell. Some have as many as 500 inactive shelf corporations in their inventory awaiting purchasers. That would mean an annual tax of about $79,000 on 500 inactive corporations.

Céspedes in his talk challenged a lawmaker who is a lawyer to help banana growers dissolve their corporations for free. But Céspedes said he doubted the lawmaker would do so.

President Laura Chinchilla strongly supports this bill. She is seeking an estimated 37 trillion colons in income that the bill would mean in the first 10 days of 2012. That’s about $74 million. She plans to spend about $30 million on developing a new school for police in Heredia. The rest is designed for other security efforts, including an effort to integrate drug users and criminals back into society.

The delays caused by the recesses Thursday probably should not be seen as discontent with the bill. Most lawmakers were anxious to start their four-day weekend.

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