President’s Laura Chinchilla’s efforts to tax certain food products still will have a negative effect on low-income Costa Ricans, said the Cámara Costarricense de la Industria Alimentaria.
The decree, which seeks to make a difference between what the poor eat and what better off residents eat, goes into effect today.
The chamber said that the plan was not thought out well. For example, it said that 90 percent of bread products will be affected by applying the current 13 percent tax to various items used in baking.
The chamber also said that there was not enough time given to
allow merchants to adjust the tax on products that will not be subject to the levy. The chamber is asking the president, via a letter sent Friday, to suspend the decree until adjustments can be made.
The president’s decree was issued in the wake of the failure of her 14-percent value added tax. The decree keeps some basic food items tax-free, but applies a tax to other items that the president considers a luxury, such as T-bone steak.
Previously these also were tax-free.
Meanwhile, some expats report that small operators, such as those who sell vegetables and other food products at the weekly ferias, are mystified and confused by the edict.