Devil is in the details of tax fraud bill

Dear A.M. Costa Rica:

So the anti-tax fraud bill entered the assembly last Thursday. Well, it seems to be a good measure to prevent tax fraud, doesn’t it?

On further inspection of the bill, which is not easy to come by since parliaments Web page is a jungle, it turns out that it will increase this country’s red tape big time: on each interaction with a public entity, for businesses and individuals alike, there will be a background check with the tax department about your state of affairs. The request will not be executed if there is a debt or an irregularity.

We all know from our experience of dealing with the administration here that there WILL be situations here where you simply will be deadlocked. And nobody will care.

I personally have been in the situation where I was denied access to my bank account because my residence permit had expired for three days. Now resolve that quickly!

I also witnessed how hard it is to de-affiliate yourself with Tribulation Directa. That’s where you have to be registered when you are self-employed. You have to bring an AyA receipt to do that. Now, these receipts are not sent out by default any more. You get them by request. So you have to motivate your landlord to take time off from his job during business hours, that’s when the Instituto Costarricense de Acueductos y Alcantarillados offices are open, and get the receipt. You can imagine that said person is still registered.

And these are two examples of how hard it can be to get things done NOW, without the new bill.

I call on everybody to spread the word about the truth of the bill and to initiate a national discussion about its contents. It’s not too late since it has not been approved yet. I seriously think that once approved it will make things much worse for everybody in this country! Spread the word!

Oh and by the way, the bill also modifies the income tax code in a way that does away with Costa Rican source income-only taxation by default. This privilege will be granted to you, according to the law, by signing a declaration of your (worldwide) patrimony. Unless you do that you will be taxed on your worldwide income.

Thomas Hemmer
Santa Ana
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