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The tax is
consistent with the Law of
Strengthening Public
Finance, transforming Uber
into a legal company. /
A.M. Costa Rica wire
services photo
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Uber's announcement that it
will collect 13 percent
sales tax, will make
regulation unnecessary
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By the
A.M. Costa Rica staff
Pablo Heriberto Abarca, deputy,
and president of the Economic
Affairs Committee of the
Legislative Assembly, reported
that the bill of Law # 21.228
that is in a study to regulate
the transport service through
technological platforms, similar
to Uber, could be archived or
canceled if the company charges
clients the 13 percent sales
tax.
Deputy Abarca said the Uber
representatives confirmed to the
members of the Commission that,
starting in June, it will apply
the 13 percent value-added tax
(VAT) to its fares. This
decision to apply the tax is
consistent with the Law of
Strengthening Public Finance,
transforming Uber into a legal
company.
Zoraida Rodríguez Montenegro,
Director of Government Relations
and Public Policies of Uber said
that as of June every trip will
charge the 13 percent tax which
the user must pay, so the cost
of the service will go up as of
that month.
Deputy Abarca said that the tax
charge on all Uber services
represents the legalization of
the service, de facto or
automatically. For that reason
the current project to regulate
Uber could be considered
unnecessary when this type of
business will be legal in June.
In law and government, de facto
describes practices that exist
in reality, even if not
officially recognized by laws.
It is commonly used to refer to
what happens in practice.
In addition, Deputy Abarca said
that the Economic Affairs
Committee could invest more time
to create a new law that
improves the traditional taxi
service, known as a red taxi.
"I think it is absolutely
relevant that as of June, the
company (Uber) is going to
collect the 13 percent tax,
which causes legalization of the
service as such, a de facto
legalization," said Deputy
Abarca. “What would remain is
how we can help taxis to have a
less complicated regulation."
Zoraida Rodríguez,
representative of Uber, said the
company has always been willing
to be regulate, but considered
that this bill was wrong to
consider Uber' as a public
service, denaturing the spirit
of the activity and that the
amount requested by the
government for the inscription
of the company of ¢45
million colones approximately
(about $74,414) is
disproportionate.
"The company has invested more
than 30 million dollars in the
country and has generated more
than 22 thousand jobs, so the
amounts established by the
project for the registration of
the service is disproportionate
and would endanger the entry
into force of new platforms,"
said Rodriguez.
According to Rodriguez, 92
percent of members who are
currently registered in the
country as drivers, have
relatives who depend directly on
the profits generated by the
Uber service, so regulating the
activity in the terms that the
government wants would cause a
very negative impact.
Deputy Roberto Thompson Chacón
agrees with the Deputy Abarca,
in "evidently by including this
service in the Law of
Strengthening Public Finance and
knowing that the company will
charge the tax, the service will
be legal."
On March, as A.M. Costa Rica
reported, the Attorney
General, Julio Jurado, told
the members of the Economic
Affairs Committee that the
file #21228 known as Reform of
the Remunerated Transportation
System for Individuals and
Regulation of Transport
Technology Platform Companies
(similar to the transport
service provided by Uber)
could be constitutionally
problematic due to possible
violations of the principles
of reasonableness and
proportionality.
According to Attorney Jurado,
the reform is requesting:
- Companies that provide
public transport services will
have to pay 3 percent tax to
the Council of Public
Transport. That tax will be
charged on the rate to the
client.
- The amount collected for
this tax will be transferred
to the National Mobility Fund,
which will also be
administered by the Public
Transportation Council. The
amount collected will be used
for the modernization of
public transport.
- In addition to this tax, the
companies that want to provide
transport services must make a
registration payment
requirement of ¢45 million
colones approximately (about
$74,414) and renew that
registration with another
payment of approximately ¢22
million colones (about
$36,380).
- The maximum number of
vehicles that can operate
under the platform mode (like
Uber) cannot be more than the
number of existing taxis.
The Attorney General said that
these factors could be
considered as possible
violations of the principles
of reasonableness and
proportionality of the
Political Constitution.
Law project #21228 to regulate
public transportation, was
presented by the Ministry of
Public Works and
Transportation.
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Could other private
transport platforms, like
Lyft , now operate in Costa
Rica? We
would like to know your thoughts
on this story. Send your
comments to: news@amcostarica.com
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