Slowly the Laura Chinchilla administration is moving to raise bit by bit taxes that could not be approved in one large package.
A legislative committee is studying changes to the law now, and the administration’s top financial minister let the cat of of the bag Wednesday. He told a local radio station that just about anything could be subjected to taxes.
Among these items are the annual Christmas bonus workers receive from employers, those large lottery prizes and a special kind of savings account, called salario escolar, that helps parents pay for the expenses of the new school year. None is taxed now.
The administration already has included all but basic food items in the sales tax. Many such items, like t-bone steak, had been exempt at the cash register.
Expats already have seen increased taxes. The first full year of taxes on corporations was due Jan. 31. That is supposed to give more resources to the police.
Then there is the luxury home tax that went into effect Oct. 1, 2009, during the Óscar Arias Sánchez administration. Many expats struggle with trying to figure if their home is subject to the tax. The proceed are supposed to eliminate slums.
This year, expats and Costa Ricans who have maritime concessions are struggling with major increases in the annual canon or tax there. And those who have homes elsewhere were supposed to report their estimated new assessments to the municipality by the end of the year. Higher assessments will mean more taxes.
But that is just the start. Édgar Ayales Esna, the minister of Hacienda told ADN news that a bill calling for many more taxes would be presented within a year. Basically he said everything is on the table.
Perhaps sensing the future, the country’s business chamber came out to support a value-added tax Tuesday. Such a levy on every stage of production provides a good way for tax officials to catch evaders. But the value-added tax also is a windfall for governments because they generate much more revenue.
Recently there have been $1 and $2 increases in the exit tax at airports and also a tax levied on casinos that is being appealed.
The original Chinchilla administration proposals called for taxes on passive income like rents and interest. Medicine also would have been taxed, and the property transfer tax would have been doubled. Also proposed was a tax on the services of professionals like lawyers, physicians and dentists. There also was a plan to tax private schools tuition and private medical care.
The bulk of the nation’s lawmakers supported the Chinchilla administration proposals. The bill died only because the Sala IV constitutional court questioned the procedures, not the content.
So now little by little these concepts are surfacing again.
Costa Rica is in much the same situation as the United States with a growing national debt, continual annual deficits and lawmakers and presidents who fail to put forth serious measures to stem the hemorrhaging. For example, a legislative committee Wednesday afternoon approved a bill that would create a fund to provide loans so some middle-class workers could buy homes. Although the bulk of the money would come from lending forced on banks, there is a clause allowing the input of public money.
Ayales was at the legislature Wednesday to promote the administration’s plan to levy a 30 percent tax on so-called speculative capital. The law says that only non-residents would pay the tax on short-term investments. The Comisión Permanente de Asuntos Hacendarios approved a substitute text of the bill. It gives broad authority to the Banco Central to force investors to keep their money here longer or to levy a tax.
The stated purpose of the plan was to support the colon against a large influx of dollars put here because Costa Rica has a relatively high rate of interest. Those who send money out of the country already are supposed to pay an 8 percent assessment to cover future income tax, but hardly anyone does.