No menu items!

COSTA RICA'S LEADING ENGLISH LANGUAGE NEWSPAPER

HomeArchiveTourism-Sector Tax Breaks Suspended

Tourism-Sector Tax Breaks Suspended

A lengthy battle between the Costa Rican TourismInstitute (ICT) and the Comptroller’s Office has taken aturn against the tourism industry as the institute wasforced to rescind tax exemptions previously granted tocar-rental companies, hotels and other tourism-relatedbusinesses.The exemptions, which had been in place since the1980s, allowed for the tax-free import of products suchas cars for rental companies, microbuses for travel agencies,and lamps and kitchen utensils for hotels.The order by the Comptroller’s Office to suspendthese tax breaks could have significant consequences for the industry, according to private-sectorleaders.TOURISM Minister Rodrigo Castro,who heads the ICT, said the Jan. 20 decisioncould deprive Costa Rica of foreigninvestment – something Castro and otherindustry leaders say is crucial if the countryis to keep up with its rapidly increasingnumber of visitors. Approximately 1.5 milliontourists visited the country last year, a20% increase over 2003 (TT, Jan. 7).“If another neighboring country offers(business owners) a series of conditions andadvantages much more favorable than thosethat we offer, that investment will go somewhereelse,” Castro said in a statement.One such neighbor and competitor,Nicaragua, is studying a legislativereform measure that would expand tourismincentives and benefits to small businessesin that country.Costa Rica’s Tourism Minister saidchanging the rules for businesses has adetrimental effect on investment as well.“The regulatory certainty of this countryshould be permanent, it should be clear,it should be stable… so that the investorfeels calm about coming to invest here. Wecan’t change the rules of play for investorsconstantly,” Castro said.OTHER business leaders said thedecision will have a direct effect on thequality of tourist services.“We’re astonished and annoyed,” AnaGabriela Alfaro, executive director of theCosta Rican Chamber of Hotels, told TheTico Times Monday. She said theComptroller’s handling of the decision,which she called “almost perverse,” couldcause many hotels to close.“Prices for the consumer would goup,” she said. “The quality of tourist serviceswould decrease.”“This decision paralyzes the process ofimproving infrastructure and the quality ofnational tourism services,” said CarlosRoesch, president of the Chamber ofHotels, in a statement.Carlos Ruíz, commercial director forthe Hotel San José Palacio, said the decisionis “worrying” and could affect existingand future investments here.Actions like this one, Ruíz added,“make those in the hotel and rental carindustries think about whether it’s worthit… to maintain an investment here.”THE disagreement at the heart of theconflict is whether the Tourism IncentivesLaw exempts companies from taxes indefinitely,or only for a defined initial period.The ICT has argued the former interpretation,and the Comptroller’s Office has chosenthe latter.Roesch said the Comptroller’s recentdecision is all the more surprising giventhat in 1999, the Constitutional Chamberof the Supreme Court (Sala IV) “concludedthat the Tourism Incentives Law doesnot have an established time frame.”Roesch’s statement called on theTourism Institute to consult the Ombudsman’sOffice for an analysis of the decision.According to ICT spokesman AlvaroVillalobos, the institute is currently studyingits options for legal action against theComptroller’s Office.

Trending Now

Vaping Sends More Costa Rican Teens to the Doctor as New Rules Wait Until 2027

Four out of every 10 medical consultations for vaping-related disorders recorded in Costa Rica last year involved patients between the ages of 10 and...

Costa Rica Nears 49,000 Short-Term Rentals as Tourist Numbers Lag

A new study counts 48,985 short-term rental listings in Costa Rica, more than double 2019, while international arrivals remain below pre-pandemic levels.

Panama Canal May Restrict Ship Traffic as El Niño Worsens

Panama Canal administrator Ilya Espino de Marotta says further cuts to daily ship transits remain possible as El Niño worsens drought and strains water supplies.

Costa Rica Explains VAT Refunds for Hotel Stays Abroad

Travelers paying for overseas accommodation through certain booking platforms with Costa Rican credit or debit cards can face an automatic 13% VAT charge, even...

Costa Rica Supreme Court Considers Changes After Judicial Corruption Cases

Costa Rica’s Supreme Court has ordered a review of the rules judges use to determine whether suspects remain in jail or are released under restrictions as organized crime and corruption cases put new pressure on the justice system

Billfish: Another Step Forward in the Eastern Tropical Pacific

Some important decisions arrive with headlines, prohibitions, and grand speeches. Others seem much more modest. Last week in Lisbon, we saw one of the...

Costa Rica Bill Proposes to Ban Conversion Therapy

A new bill looks to ban practices aimed at changing, repressing, nullifying, or suppressing a person’s sexual orientation, gender identity, or gender expression, commonly...

Two Detained With 125 Sea Turtle Eggs During Costa Rica’s Ostional Arribada

Authorities detained two people carrying 125 olive ridley sea turtle eggs during the September arribada at Ostional, where only authorized community members may legally collect eggs.

US Open Celebrates Hispanic Heritage During 2026 Quarterfinals

The US Open is putting Hispanic and Latin American tennis in the spotlight today with its annual Hispanic Heritage celebration at the USTA Billie...
Avatar
🌴 The Weekly Pura Vida

Costa Rica, Once a Week

The week's top stories, weather & insider tips — delivered every Sunday. One email, zero clutter.

🔒 Free. No spam. Unsubscribe anytime.

Loading…

Latest News from Costa Rica

Costa Rica Coffee Maker Chorreador
Costa Rica Car Rentals
Costa Rica Travel Insurance
Costa Rica Travel