Tourism industry leaders wrestle with looming sales tax impact

Citing higher costs that could push tourists away from Costa Rica, tourism industry leaders decried the finance ministry’s decision to put a sales tax on entrances into protected lands and national parks as well as tourist activities.

Wednesday Pablo Heriberto Abarca, president of the Cámera Nacional de Turismo, said the added sales tax is unconstitutional and based on subjective interpretation. The section of the 1982 general sales tax law under debate says night clubs, social centers, and recreation centers or gyms are subject to taxes. This new tariff implies that adventure tours like hiking, canopy, or rafting are benefiting from public lands and should thus be charged within this grouping.

“The tax law does not even clearly state national parks nor does it say anything about activities and tours,” Abarca said. “This tax has never been collected and now, 384 months after the creation of the Ley del Impuesto General de Ventas, they hope to add on to the law through an interpretation.”

The increased fees are due to take effect next Wednesday, three months after an April 30 decree issued by the Ministerio de Ambiente y Energía that increased entrance fees into public protected areas. Abarca claims that tourism authorities were never given an official notification of the Ministerio de Hacienda’s plans to impose the tax.

Kathia Valverde Madrigal, the president of Costa Rica’s association for tourism operators, said immediate consequences will follow this tax for an industry that is already reeling from mounting expenses.

“It’s clearly going to affect numbers for tourism businesses,” Ms. Valverde said. “Costa Rica cannot allow its tourism sector to keep dropping as more and more people go to places like Nicaragua and Panamá. We can’t keep being the most expensive choice.”

She said tour guide and adventure travel companies will have to take up the burden of paying the charge, especially if they are traveling with dozens of patrons. Tourists already pay high costs to enter national parks without this new recreation tax, including a $16 per person fee to enter Paque Nacional Manuel Antonio.

Rising prices for tourists, companies that decide to avoid national parks all together, and potential  business closures are all foreseeable consequences that could pop up, Ms. Valverde said.

Tuesday lawmakers argued whether a retroactive assessment of the sales tax was valid.

“It seems that they’re wanting to carve out the tourism sector just over an interpretation of the law,” said Luis Vázquez Castro, head of the Asamblea Legislativa’s tourism commission.

Ms. Valverde and Abarca are scheduled to meet soon with the tourism minister, Wilhelm Von Breymann, and the finance minister, Helio Fallas, to analyze the problems that now confront businesses in the industry.

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