Costa Rica Coffee Guide

Farmers Seek Reduction in Property Taxes

October 23, 2009

Citing an explosion in the value of land in Costa Rica as a result of the country’s real estate and tourism booms, coffee growers and other agricultural producers are asking the government to reduce property taxes for farmers and ranchers.

Some 200 farmers marched on the Legislative Assembly on Monday to present a bill that would seek a 75 percent reduction in the assessed value of farms and ranches and a reduction of property taxes from 0.25 percent to 0.1 percent of assessed value of properties.

The agricultural producers also are asking authorities to assess land every 10 years instead of every five years.

Lawmakers from all the major political parties who sit on the Legislative Assembly’s agricultural committee came out of their offices to address the crowd and receive the bill, an indication that the measure will have enough support to pass.

“Property taxes on farms should be based on the use of the land, not the market value,” Citizen Action Party legislator José Joaquín Salazar told the crowd which gathered under a light rain.

The increases in property values, especially in tourist areas, have made taxes onerous for agricultural producers, said Guido Vargas, president of the board of the Costa Rican Coffee Institute.

“Taxes for farmers with a view of Arenal Volcano are multiplying, but having a view of the volcano does not make land any more productive,” he said. “It’s not important to us if a hectare of land is worth $1 million or has a value of $20 million; (for having a higher value) this hectare does not produce more tons of cane, or bushels of coffee, it doesn’t fatten cattle more or produce more stalks of plantains.”

Tourism has topped agriculture in recent years as Costa Rica’s No. 1 foreign exchange earner as Costa Rica’s economy has become more diversified, diminishing the importance of agriculture Vargas, wearing a typical campesino hat, said the taxes have piled on top of other challenges to the agricultural producers – such as an increase in plant pests, falling prices of beef, slacking coffee production and the effects of natural disasters.

“We believe that as a society, if we don’t do something, our national production, alimentary security, is going to disappear,” said Vargas.

–John McPhaul

 

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