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    Attention Costa Rica Importers and Exporters: A VAT Hike is Imminent Over the Next 2 Years

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    The Costa Rica News (TCRN) – The Minister of Finance, Helio Fallas, has confirmed that a bill is on the horizon for the Value Added Tax (VAT), which will raise it to 14 percent at the first of the New Year and gradually increase it to 15 percent by 2016.

    Fallas stressed that this is a bill that will be voted on in January, after consulting with the sector’s workers, businessmen and traders, to achieve a consensus for greater flexibility in the Legislature.

    Services such as education and health that are currently exempt from the sales tax will be included in the VAT but with a different lower rate, but the Minister did not disclose the amounts to be applied by the new tax.

    In February, the government expects to submit to the VAT bill to Legislature, amid opposition from five of the nine legislative factions who do not want to approve new taxes until significant cuts have been made in the budget to reduce spending.

    Already in the legislative process are two bills that seek to strengthen the fight against tax evasion and smuggling.

    Both projects aim to increase income taxes over the next three years and reduce the fiscal deficit of the country, which as of November is 5 percent of national production, equivalent to ¢1.3 billion. (Amelia Rueda)

    The Costa Rica News (TCRN)

    San Jose, Costa Rica

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