If the food is in a can, it’s probably going to be taxed

The list of untaxed items that went into effect Monday is heavy on fresh products. In most cases, canned products, except tuna, are subject to the 13 percent tax.

Many cuts of meat are not taxed but tenderloin, T-bone, delmonico and sirloin are. This followed the Chinchilla administration’s goal of keeping tax-free those food items that the lower-income families might purchase.

The Cámara Costarricense de la Industria Alimentaria asked President Laura Chinchilla Friday to suspend the decree that she issued setting the new rules for taxing food items.

Monday the Cámara de Industrias also asked for the decree to be set aside. The chamber noted that some 90 products are now being taxed that were not taxed previously. The decree created uncertainty, the chamber said.

Some of the uncertainty, noted the chamber, is due to the vague language describing some of the products that should be taxed. The chamber also said that by favoring fresh products over processed foods, which are now being taxed, the president overlooks the health benefits of packaging.

The chamber also said that had the decree been published on the Casa Presidencial Web site before the effective date, there would have been an opportunity for those affected to comment.

The Ministerio de Hacienda published a press release on its Web site Monday which sought to clarify some aspects of the tax. It also reminded vendors that some of them now are obligated to collect sales tax and that they must register to do so. The tax for May should be reported and paid by June 15, the statement said.

Among some of the products that are being taxed now is olive oil, a staple of many types of food. Sunflower and corn oil are exempt, as is lard and vegetable oil.

A wide variety of meats are tax exempt, including bacon, ox tails, tripe, chicken breast, pork chops, whole chickens, ground meat and chicken wings. Chorizo and hot dogs also are exempt, as well as sandwich meat.

All kinds of fresh fruit are exempt until they are canned or dehydrated.

Similar is true with vegetables. They are tax free if they are fresh, refrigerated or dried. Taxable vegetables are those that are in jars, packed in cans or sold in sealed plastic.

Of course, rice and beans, the national staple are tax free unless they are canned. So is oatmeal, corn flour and regular coffee but not decaffeinated.

Tamales are tax free, as well as most pastas and bread products.

Most fresh, refrigerated or frozen fish are tax free, but if the product is in a can there probably is a tax. Shell fish packaged in jars, cans or sealed plastic also are taxed.

Many milk products, fresh eggs and sour cream are tax free as well as fresh cheese that have no additional ingredients unless the cheese is canned. Vinegar also is tax-free.

Diapers, many school products, including texts, candles (unless they are decorative, aromatic or colored), mops, brooms and potable water are exempt from the tax, as is most soaps.

Toilet paper, toothbrushes, toothpaste, hearing aides and wheelchairs also are in the exempt category.

Among the missing appear to be jellies and preserves. Several large manufacturers of these products exist in Costa Rica and each has a large work force.

Sardines also are listed as tax-free unless they are canned. Also missing from the tax-free list are a number of oriental products and specialty items, including matzoh, the Jewish unleavened bread.

The decree issued by the president followed a negative Sala IV constitutional court decision on her massive tax plan for a 14 percent value added tax that would cover many more transactions.

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