Finance ministry warns of impact caused by end of corporate tax

The finance ministry bemoaned the action of the Sala IV constitutional court in voiding a tax on corporations, but a statement did not say an effort would be made to pass the tax again.

The Ministerio de Hacienda said that the constitutional court decision creates a difficult situation for the country and the effect will be felt next year. The court voided the tax on corporations as unconstitutional but said that the decision would not take effect until 2016.

The ministry said that the taxes would continue to be collected for this year and that interest and fines would be assessed for late payment. The deadline to pay the tax is Saturday, which means payment can be made without penalty Monday, the next business day.

The ministry statement noted that 95 percent of the money collected via this tax goes to support the Ministerio de Seguridad Pública. It said that the ministry wold continue to be supported despite the demise of the tax.

But the ministry warned of an increase in the fiscal deficit for 2016.

The tax is based on the salary of a specific judicial employee. For 2015 the tax for an active corporation is 201,700 colons. That’s about $382. Owners of inactive corporations pay half that.

The Sala IV said that a substitute bill that contained significant changes and subsequently was passed had not been advertised as the law required.

Three magistrates said the tax itself was unjust because it charges big and little corporations the same amount.

In order to make up for the loss of income, the minister, Helio Fallas, urged lawmakers to pass two pieces of pending legislation.  One is designed to improve prosecution of tax fraud and the other attacks smuggling.

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