Hacienda’s bite beginning to snag consumers

This was bound to happen.

Reporters are receiving reports of merchants jacking up prices by 1.78 to 2 percent to compensate for the bite the tax agency is taking from credit and debit card transactions.

The Minsterio de Hacienda issued the regulation last year in order to get advanced income tax payments from those in business. The credit card processing companies are suppose to remit the money to the ministry when they process transactions.

Credit card sales already cost merchants some 4 to 6 percent, depending on the processing company. That is why some offer discounts for cash.

Some expats have dismissed the percentage as trivial even though 2 percent may be half the net profit of a firm with a high-ticket transaction.

A.M. Costa Rica received one report of a private school increasing the amount of tuition because of the bite from Hacienda.

If a product is subject to the 13 percent sales tax, Hacienda wants 1.78 percent so that it is not taking tax on sales tax.

Theoretically Hacienda will apply the money collected to a company’s income tax payment at the end of the year. That assumed that there is income tax owed.  There does not seem to be any provision for the devaluation of the colon over the course of the year.

And there does not seem to be any way the consumer will get back the 1 percent surcharge. bite020415

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