Finance Ministry closes 30 businesses for avoiding the taxman

December 11, 2009

The Finance Ministry has closed 30 businesses around the country and plans to shutter more for failure to comply with financial obligations to the state.

Of the 30 businesses shut down last week, 12 were located in San José, nine in Guanacaste, five in Alajuela, two in Limón and two in Heredia. The businesses included hotels, restaurants, night clubs, auto repair shops, electrical appliance stores, hardware stores, accessory stores and a real estate and architecture firm.

According to the Finance Ministry, the businesses failed to turn in receipts for sales, failed to present a tax return within an established time frame or neglected to pay taxes.

An estimated 50 more closures are expected before the end of the year, many of which could occur this week, as the deadline to pay income taxes in Costa Rica is Tuesday, Dec. 15.

To date, 214 businesses have been closed in Costa Rica this year for failure to comply with financial obligations.

The Vice Minister of Income for the Finance Ministry Loretta Rodríguez indicated that the government body has increased efforts to collect tax payments from businesses during a year of economic hardship.

“The economic crisis has caused a significant decrease in the payment of income taxes,” Rodríguez said. “The Finance Ministry has strengthened information services and attention to taxpayers to facilitate voluntary fulfillment of tax obligations. The closing of businesses is a tool that demonstrates how we can be effective in decreasing companies´ failure to pay. We will keep using it through the end of the year so that taxpayers improve their behavior and correct their offenses.”

The Finance Ministry said delinquent businesses are given five days to pay outstanding fees. If taxes remain unpaid after the five day deadline, a member of the National Police and two tax collectors arrive at the site of each of the companies to shut down operations.

“This is one of the most serious sanctions we have,” Rodriguez said. “It is as damaging in terms of the economic cost to the owner, who loses sales and employees, as well as because of the bad image that it projects to clients and suppliers.”

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