President Carlos Alvarado announced on Sunday night that the tax plan to the International Monetary Fund (IMF)
will be withdrawn from Congress. - Movimiento Rescate Nacional photo -

Published Monday, October 5, 2020

Tourism sector calls for
stop road blockades

By the A.M. Costa Rica staff

The Chamber of Tourism, Canatur, calls on protesters to suspend the blockades in several zones of the country, especially during the weekend. The call is to avoid worsening the tourism situation.

President Carlos Alvarado announced on Sunday night that the tax plan to the International Monetary Fund (IMF) will be withdrawn from Congress.

The so-called tax package is part of the proposal that the government presented to Congress before it gets sent to the IMF asking for a loan of $1.75 billion.

The blockade made by protesters is led by two former deputies José Miguel Corrales and Célimo Guido, who created the group Movimiento Rescate Nacional (National Rescue Organization in English).

The protesters reject the plan of the government with the IMF, to create more taxes and, as they said not on a substantial decrease in government spending.

According to the businessmen, the protests and blockades could cause negative effects on the tourism sector such as cancellation of reservations and the loss of activities and scheduled tourist tours due to not being able to transfer travelers in the middle of the blockades.

The Chamber fears that the few international tourists already in the country will be harmed by delays caused by blockades or even loss of their flights.

As a result of the protesting in several zones around the country, there has been obstructed access to many tourism destinations, a situation that is causing complications for national and foreign tourists who need to move within the national territory, said the Chamber in its statement.

"We fully understand the discontent and the struggle that you undertook (referring to the protesters), and like you, we also reject the measures contained in the proposal to negotiate with the IMF," Rubén Acón, president of the Chamber said. "However, preventing the free transit of other citizens who must work and provide income for their families, is not the most assertive way to be heard, to continue with the protests the damage would be for the Costa Ricans themselves and against the image of the country."

According to the most recent report from the Ministry of Security, several places have been blocked by protesters, among:

• On Ceibo River bridge in Puntarenas Province.

• District of Loma Verde in Pérez Zeledón, in the southern zone of the country.

• Over the Aguas Zarcas River bridge.

• In San Carlos Pier, in Alajuela Province

• On the Arenal River Bridge, in Alajuela Province

• Over Peñas Blancas River bridge

• On Puerto Viejo River bridge in Sarapiquí.

• On Lorenzo River bridge in San Ramon.

• On route 32 between San José and Limon provinces.

• On Caldera Port in Puntarenas Province, among many other places.

According to the Ministry of Agriculture, during the first two days of protests, losses in the agricultural sector were calculated at $37 million.

During the demonstrations that took place on Saturday night, 16 police officers were injured by protesters, these in several zones of the country, reported Daniel Calderón, director of the police.

José Miguel Corrales, leader of the National Rescue Organization, in a video posted on the group Facebook page called on president Alvarado to talk to avoid an intensification of the conflict between the protesters and the police.

"This is a peaceful demonstration, this is a civic action, the only thing we seek is justice, " Corrales said. "By talking we can fix it, but you, Don Carlos (referring to the president) have refused to talk."

However, in a press release from the Presidential House, the government calls on the leaders of the protesters to dialogue.

Eduardo Cruickshank, the Congress President, called on the government to remake the plan to the IMF. Also, he offers himself as a mediator in a dialogue between the government and the protesters. "We do not want this to continue to increase and we are in the best disposition to collaborate so that peace and tranquility return to the whole country," said Cruickshank.

On Sunday, 17 deputies representing the political party Liberación Nacional ( or National Liberation in English) called on President Carlos Alvarado to withdraw the tax plan with the IMF.

"The National Liberation Party demands that the government immediately withdraw the proposal concerning the IMF presented on September 17, which had already been rejected by this party," the deputies said in their statement. " The government must prepare a new proposal based on a national dialogue that includes the parties represented in the Legislative Assembly (referring to the Congress) and the economic sectors of the country. ”

Since last week a large number of people took to the streets to march against the plan to impose more taxes that the government has planned. Under the "No More Taxes" slogan, hundreds of people blocked the main routes of the country.

According to the Traffic Police, main blockades were reported in Downtown San José, San Pedro, Zapote, Ciudad Colon, Santa Ana, Uvita, Limón Centro, near the APM Terminals Port, Siquirres, Puerto Viejo, Aguas Zarcas in San Carlos, near the Juan Santamaría International Airport, Alajuela Centro, Liberia, Cañas, Puntarenas Centro and Caldera Port.

Videos of the protest can be seen at Movimiento Rescate Nacional Facebook page.

Protests might also delay traffic, so for people traveling out of the two main airports, Juan Santamaria in Alajuela Province or Daniel Oduber in Guanacaste Province, it is recommended to calculate extra time of at least one hour in advance, to avoid missing the flight.

On Saturday, Sept. 19, a large caravan of vehicles reached President Carlos Alvarado’s house located in the Santana District in San José Province.

Organized by the Bloque Patriótico Pacifista (Patriotic Pacifist Group in English), hundreds of people showed up in their cars, motorcycles, bicycles and even on foot to complete a caravan of several miles.

"This is a country issue (referring to the new tax plan), it concerns everybody. The people are tired of them (referring to the government) from so much abuse, just thinking about taxes," organizers said on a video of the rally posted on the Movimiento Despierta Costa Rica Facebook page.

According to the government, the new tax plan is a temporary measure. The main taxes disclosed by the government that are included in the 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 following two years, it will be 0.2%, the government said 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 company 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.

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