Tourism organizations cut a deal on back sales tax

Tourism organizations have made a deal with the executive branch to postpone a 13 percent sales tax on recreational activities until Jan. 1, 2016.

The organizations, the Cámera Nacional de Turismo, the Cámara Costarricense de Hoteles and the Asociación Costarricense de Operadores de Turismo said that the government promises not to collect back sales tax.

The organizations said that the tax agency, the  Dirección General de Tributación, has promised to fast track a bill in the legislature providing for eliminating the tax debt.

The debt comes from tourism activities for which tourism operators did not even know were taxed. That all changed in the last days of the Laura Chinchilla administration when a decree redefined the sales tax law to include typical tourism activities including bird watching. Some tourism firm quickly found themselves on the hook for sales taxes dating back years because the tax law was 6 years old.

An announcement from the tourism organizations said that the tax will be charged on zoo visits, canopy tours and ziplines, nature walks, bungee jumping and bird watching. A key point seems to be if the vendor has a fixed base of operation, such as an office.

Pablo Heriberto Abarca, president of the tourism chamber, praised the executive branch action. However, the approval of the idea by the organizations does not preclude a legal challenge to the law by an individual or firm. The tourism organizations also may continue to seek other legal remedies, but the tourism chamber said that the tax agency does not think it has standing to challenge the law.

In another action related to the sales tax, the  Cámara Costarricense de la Industria Alimentaria announced that it would not accept an initiative or reform that creates new taxes.

The food marketers chamber said that the government should make structural changes that have been the principal cause of budget problems.

The chamber referred to recent disclosures of luxury pensions of former high public officials, the inflated salaries of pubic employees and other abuses.

José Manuel Hernando, chamber president, said any effort to increase the existing 13 percent sales tax is not acceptable. The  government is going to propose a value-added tax, but it may seek a higher percentage.

He said that the government may seek to include categories that are not now taxed, and that every new tax generates an immediate impact on the pockets of Costa Ricans.impueastors101714

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