  More agreements reached in the meetings are in the process to be presented to Congress. - Casa Presidencial photo - |
|||
  
  |
 Published Thursday, December 10, 2020 New
tax, regulating tax-haven
countries as agreements between civilians and the government By the A.M. Costa Rica staff The government announced the first two projects as a result of the agreements reached in the meetings that took place recently between government representatives of unions, chambers and civilians' organizations to develop strategies for improving the economy and reduce the fiscal deficit. Those meetings were created as a condition for protesters to stop blockades in ports and the main roads of the most important routes in the country, causing obstruction of public services and unleashing violence and vandalism.  In October, the protests marched against the government's plan to increase taxes as part of an agreement with the International Monetary Fund, IMF, for a loan of $1.75 billion. The first agreement was the creation of bill No.22,353 which seeks to regulate the financial activities of public employees in countries that do not have a financial exchange treaty with Costa Rica, known as tax-havens. If the bill is approved, public employees must report whether they have investments or bank accounts in these countries. In the list of tax-haven countries are Bosnia and Herzegovina, North Korea, Cuba, Iraq, Norfolk Islands, Kyrgyzstan, North Macedonia, Maldives, Montenegro, Oman, Palestine, Timor-Leste, Uzbekistan, Wallis and Futuna. The agreement was in bill No.22,354 which applies a 25% tax on the lottery prizes higher than $375. In Costa Rica, the lottery is a monopoly managed by the government through the Social Protection Board, a public organization in charge of lottery sales in the country. In case this bill is approved, the tax will be reduced automatically by the board. Both bills were presented to Congress, where the deputies will make an analysis and then vote for the approval, rejection, or request for modifications. More agreements reached in the meetings are in the process to be presented to Congress, the government said in its statement. According to the government, the agreements reached in the negotiating tables, if all are approved, could cover 2.18% of GDP (approximately $1.2 billion). However, the Ministry of Finance had announced that the fiscal deficit should be reduced by 2.5% of GDP (approximately $1.4 billion). In October, President Carlos Alvarado announced that the original tax plan to the IMF was canceled. The main taxes disclosed by the government that were included in that plan are: • A new tax to all financial transactions. The tax of approximately 0.3%, would be applied to all transactions that are made through banks, such as purchases with debit or credit cards, payments of public services using internet banking, or every time a banking platform is used to move money from one account to another. The new tax will apply for four years to all banking and securities transactions. In the first two years, it will be 0.3%. In the next two years, it will be 0.2%, said the government in its statement • Tax is on salaries, pensions, company profits, and money transfers abroad. In the case of wages, the tax will be staggered, from 2.5% to 10%, depending on the amount of wages. Starting with salaries of $1,400 and up. In the case of the earnings of independent professionals, the tax will apply progressively from 2.5% to 10%, starting on reported earnings of approximately $6,110 and up. • Tax on companies' profits. In this case, a tax would also be charged in a staggered manner, between 2.5% and 10%. Starting with reported net profits of approximately $183,302 and up. • A 5% tax on sending money abroad. The tax will apply to people or businesses that send money to and from Costa Rica to any country, regardless if the business is or is not domiciled in the country. • Extra house tax. Currently, the property tax is 0.25% of the taxable value of the property. The proposal is to double or an increase of 0.50% to 0.75%. • More indirect taxes would be carried out through the elimination of exonerations that are currently in the income of cooperatives, school salary bonuses, capital income among others -------------------- What should the government do to improve the economy and reduce the fiscal deficit? We would like to know your thoughts on this story. Send your comments to news@amcostarica.com |
||
         
 |
|
|
 |
 |
 |
 |
 |
 |
 |
 |
 |