The new emergency tax plan being studied by Congress aims to increase government revenues by simplifying the tax code, cracking down on tax evaders and taxing the incomes of foreign citizens living in the country and Ticos living abroad, reported the daily La República. 

If the tax plan is approved, foreign citizens receiving pensions, dividends or any other type of income from abroad will be subject to taxation. 

According to Adrián Torrelaba, director of the Direct Taxation Agency, the country is going through a fiscal crisis which forces the government to improve collection and expand its reach to areas which have previously been tax-exempt.           

“Costa Rica’s development is comparable to that of countries that collect between 18 and 19 percent of people’s income in taxes, Costa Rica collects only about 13 percent,” Torrealba explained. “Our current lifestyle is unsustainable. We have to imitate other developed countries’ tax systems. People pay about 40 percent in taxes in the European Union, 30 percent in the U.S. and 29 percent in Japan.” 

Torrealba promised the tax on foreign incomes would be fair and would seriously affect only residents with incomes higher than ¢1 million ($2,750) a month. If the plan is approved, the country will negotiate with foreign governments to guarantee that no one is taxed in two countries.

Tourism Sector Demands
Long-term Tax Incentives

If the National Tourism Sustainable Development Plan meets its main goal, Costa Rica will be receiving 2.3 million tourists a year by 2010. Tourism representatives argue such rapid growth will be possible only if the sector receives substantial government assistance in the form of tax exemptions, reported the daily La Nación. 

The plan was developed by the Costa Rican Tourist Board (ICT) and was formally announced during this week’s National Tourism Congress in San José.  The tax exemption requests come at a difficult time, as the government is attempting to pass a new tax plan to overcome the fiscal deficit.

Hotel owners are requesting import tax exemptions on articles they deem absolutely necessary for their operation. The ICT also recommends the government grant new hotels an eight-year land-tax exemption as well as preferential treatment on income tax. 

The plan looks to introduce order and long-term planning to the development of  tourist destinations by creating 10 specific development zones -- Papagayo, Puntarenas and Nicoya Gulf Islands, Central Pacific, Talamanca, Central Valley, Monteverde and Volcanoes, Northern Flatlands, North Caribbean, and South Caribbean. 

Priest Takes Shovel and Helps
In Search for Orosi Landslide Victims

The government has declared a national emergency and allocated ¢100 million ($273,000) for relief in the Caribbean-slope area of Orosi, where torrential rainfall and deadly landslides wreaked havoc over the weekend, causing millions in damages and taking the lives of several area residents. While government agencies continued to point fingers at each other over causes of the disaster, rescue workers continued efforts – interrupted frequently by fresh rainfall which increased the danger of new avalanches – to find seven people believed buried in the mud. They were joined by Orosi Catholic priest Carlos Alfaro, who took up a shovel, reported the daily Al Día. 

“Our mission is to give hope to the people who lost their homes and family members,” Alfaro explained as he took a short breather after an entire morning of shoveling. “This is the job that should be expected from a priest and an area neighbor. This is the best form of solidarity.”

Some 13 homes were destroyed in the deadly slide, and more than 400 people were forced to evacuate their homes. 

“The consequences of this disaster will be felt for a long time,” Alfaro explained.  “We’ve gotten a good response from the community. Many people that have come from far away to help and we’ve had plenty of donations.” 

He took the opportunity to request government assistance in helping to protect the Orosi church, which dates to colonial days. 

Don’t miss this Friday’s print edition of The Tico Times for complete coverage of the disaster and rescue efforts, and how you can help the victims.  

Home | Top Stories | Central American News | Business News | Daily News
  Editorial Cartoon | Travel & Leisure | Exchange Rates | Classified Ads | Display Ads
Subscribe! | Travel Guide | Archives | Links | About Us | Contact Us