Minister asks to use proposed corporate tax income for police salaries

The security minister told lawmakers Thursday that if they approve the proposed renewed tax on corporations and make a slight change he will hire 1,000 more police officers.

The minister, Gustavo Mata Vega, was appearing before the Comisión Permanente de Seguridad y Narcotráfico. The committee is believed ready to vote and send the bill, No. 19.818, to the full legislature.

Under terms of the new bill, the Ministerio de Seguridad Pública would be 90 percent of the income from the tax. But he would be able to spend the money only on building new police stations or purchasing or maintaining police equipment.

Mata is asking lawmakers to change the bill to give him the option of using the money for police salaries.

This is the tax on corporations that was ruled unconstitutional in January 2015. The Sala IV constitutional court ruling was based on a technicality because lawmakers did not advertise a revised tax bill correctly before they passed it.

Bernardita Marín, a vice minister in Seguridad Pública said 1,000 new police officers would cost about 10 billion colons. That is about $19 million. However, the corporate tax is estimated to raise at least twice that amount.

The security ministry has had money problems because the central government reduced its budget in anticipation of income from the corporate tax. But then the tax was ruled unconstitutional.

Many expats hold vehicles, boats and dwellings in corporations.

The committee decided to charge corporations without economic activity 15 percent of  the base salary used in the law to establish such fees. That would be 63,600 colons or about $120.

Corporations that have a small amount of economic activity would pay the same.

Corporations with annual income of 50.9 million colons or less would pay 25 percent of the base salary or 106,000 colons.

Larger corporations with income between 50.9 and 119 million colons would pay 30 percent or 127,200 colons. Corporations larger than that would pay 50 percent of the base salary or 212,000 colons.

The base salary is indexed to inflation, so the amount would increase each year.

The previous law imposed the same amount of tax on large and small corporations.

Gustavo Mata addresses the committee

Gustavo Mata addresses the committee

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